Crude prices vault to $70 as US refinery demand increases

29 June 2007

Mumbai: Crude prices rose to a nine-month high of $70 a barrel in New York amidst speculation that US inventories will slip as refineries increase output of gasoline and other fuels.

Crude oil for August delivery rose 97 cents, or 1.4 per cent, to $69.94 a barrel at 9:32 a.m. on the New York Mercantile Exchange. Futures touched $70.09, the highest since September 1. Prices are down 3.2 per cent from a year ago.

Brent has been higher than West Texas Intermediate (WT) crude oil this year as crude-oil supplies in Cushing , Oklahoma, the delivery point for New York futures, rose.

Brent, which is produced in the North Sea, has also been pushed higher by threats to supply from Iran and Nigeria . Most Middle East, African and European grades are priced in relation to Brent.

Brent crude oil for August settlement rose 19 cents, or 0.3 per cent, to $70.72 a barrel on the London-based ICE Futures exchange.

Refineries in the US operated at 89.4 per cent of capacity last week, a 1.8 percentage point gain from the week before, an energy department report showed.