Gasoline prices extended their advance at the pump Friday, while gas futures fell again on a growing sense that supplies are catching up to demand.
Oil futures, meanwhile, jumped more than $1 to new 11-month highs on concerns about supply disruptions in the North Sea and growing global demand. Crude futures briefly touched $74 before easing a bit.
The national average price of a gallon of gas rose 2 cents overnight, to $3.046 a gallon, according to AAA and the Oil Price Information Service. Retail prices, which typically lag the futures markets, have risen steadily since bottoming out at $2.949 a gallon last week. Prices peaked at $3.227 a gallon in late May.
Analysts attribute much of the recent increase to price spikes in the Midwest and Plains states caused by the closure of a 108,000 barrel-per-day refinery in Coffeyville, Kan., due to flooding, and of a 250,000 barrel-per-day piece of equipment in Whiting, Ind., due to a leak.
BP PLC's Whiting refinery is expected to be back at full production by next week, while officials in Coffeyville are still assessing damage.
Strong consumer demand is also playing a role, analysts say. In a report this week, the Energy Department's Energy Information Administration said demand for gas grew last week, to 9.6 million barrels a day, or 1.4 percent higher than the same period last year. But gasoline inventories jumped by 1.2 million barrels, almost double analyst predictions of a 640,000-barrel increase.
In futures trading, light, sweet crude for August delivery advanced $1.43 to settle at $73.93 a barrel on the New York Mercantile Exchange after rising as high as $74 earlier. The last time a front-month contract traded or closed over $74 was Aug. 11.
August Brent gained $1.17 to settle at $77.57 a barrel on the ICE Futures exchange in London.
Gasoline for August delivery fell 4.15 cents to settle at $2.2248 on the Nymex.
Nymex heating oil prices rose 1.49 cents to settle at $2.1106 a gallon, and natural gas futures gained 16.5 cents to settle at $6.662 per 1,000 cubic feet.
Oil prices rose $1.12 this week, or 1.5 percent, while gasoline futures fell 8.48 cents, or 3.7 percent. At the pump, gas prices ended the week up 9.4 cents, or 3.2 percent.
On Friday, Nymex oil futures traded higher in sympathy with Brent, analysts said.
“We've had a shut down of a pipeline in the North Sea,” said Kevin Saville, managing editor for the Americas energy desk at Platts, the energy research arm of the McGraw-Hill Cos.
That has Brent traders worries that some oil supplies might be cut, Saville said.
Oil prices were also supported by a report Friday from the International Energy Agency saying global energy consumption will likely rise in 2008 at its fastest clip in recent years, but high oil prices persisting above $70 a barrel may steadily eat away at demand.
The report wasn't surprising, but did contribute to a “bullish tint on the market,” Saville said.
In earlier sessions this week, attempts by crude traders to push oil prices higher were curbed by sharp drops in gasoline futures. While that didn't happen Friday, analysts say traders of one energy commodity have a hard time ignoring strong moves by another commodity.
And gasoline futures have certainly taken a bearish turn lately.
“Gasoline inventories are starting to look almost adequate,” said Michael Lynch, president of Strategic Energy and Economic Research Inc., in Winchester, Mass.
