Crude oil was little changed near a record in New York on concern gasoline production in the U.S. may be insufficient to meet peak demand during the summer driving season.
U.S. refineries operated at 85 percent last week, down from 89 percent a year earlier, the Energy Department said yesterday. Worker productivity in the world's biggest energy consumer climbed at a higher rate in the first quarter than the previous three months, the Labor Department said yesterday. Oil jumped to a record $123.93 a barrel yesterday.
``People are more focused on the idea that we may have more demand than we expected,'' said Jonathan Kornafel, a director for Asia at Hudson Capital Energy in Singapore. ``That's going to be a big problem with the refinery runs being as soft as they are for this time of year.''
Crude oil for June delivery was at $123.52 a barrel, down 1 cent, at 11:32 a.m. in Singapore in after-hours trading on the New York Mercantile Exchange. Yesterday, futures rose $1.69, or 1.4 percent, to settle at $123.53 a barrel, the highest close since trading began in 1983.
Prices have climbed 98 percent in the past year on concerns that supplies from outside the Organization of Petroleum Exporting Countries are declining as demand from China, India and the Middle East has increased.
``This is the time of year when prices would normally be taking a breather, the lull between the winter peak and the summer peak in the Northern Hemisphere, but we're not seeing that happen,'' said Gavin Wendt, a senior resources analyst at Fat Prophets in Sydney.
U.S. gasoline demand typically peaks from Memorial Day on May 28 through Labor Day in September as holiday travel puts cars on the road.
Exxon Resumes
Price gains were tempered after Exxon Mobil Corp. said that it was working to reduce the effect of supply disruptions after a strike in Nigeria caused a halt in exports from the fifth- largest oil exporter to the U.S.
``Exxon Mobil Nigerian affiliates have notified the relevant authorities in Nigeria that the industrial action that led to notice of force majeure has been resolved,'' said company spokeswoman Margaret Ross in a e-mail to Bloomberg News. ``The affiliates are working with customers to minimize any supply impacts.''
Workers in the Petroleum & Natural Gas Senior Staff Association of Nigeria, known as Pengassan, went on strike on April 24, causing Exxon to stop about 800,000 barrels a day of exports. The two sides reached an agreement on May 2 and the company resumed production.
Brent crude oil for June settlement was at $122.27 a barrel, down 5 cents, on London's ICE Futures Europe exchange at 11:42 a.m. Singapore time. The contract yesterday climbed $2.01, or 1.7 percent, to $122.32 a barrel. The contract touched $122.70 a barrel, a record intraday price.
Inventories Climb
Oil fell as low as $120.54 a barrel yesterday after an Energy Department report showed that crude supplies in the world's largest oil consumer rose more than forecast last week.
Supplies surged 5.65 million barrels, or 1.8 percent, to 325.6 million barrels last week, amid increased crude imports, an Energy Department report showed yesterday. Analysts in a Bloomberg News survey had forecast a gain of 1.63 million barrels. Gasoline inventories also rose by 794,000 barrels.
Refiners have operated at lower rates than is typical for this time of year as the profit margin, or crack, for producing gasoline has remained at below average levels. The price difference between the motor fuel and crude oil was at $7.75 a barrel today compared with $30.33 a barrel last year.
``You have more crude coming in but it's just sitting there, no one is turning it into gasoline,'' said Hudson Capital's Kornafel. ``The margin is so cheap, you can't blame them.''
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