NEW YORK: Oil prices pulled back Friday after OPEC questioned whether crude can remain so high through the rest of the year. Meanwhile, US filling station operators pushed average gas prices deeper into record territory.
In its monthly market report, the Organization of Petroleum Exporting Countries said oil s recent volatility – the price for a barrel has swung back and forth in a $10 range over the past week alone – reconfirms the view that current price levels do not reflect supply and demand realities.
Looking ahead to the second half of the year, the cartel said: A review of the prospects … also shows little support for prices to remain at current levels.
Light, sweet crude for July delivery sank $1.74 to $135 on the New York Mercantile Exchange. Prices have fluctuated widely since they surged nearly $11 in a single session to a trading record above $139 a week ago.
OPEC s beliefs about market fundamentals aside, some traders believe prices could yet push higher. Analysts call oil s current wavering range-trading, as traders await direction from a significant move in the dollar or change in supply and demand fundamentals.
There is no driver out there to cause prices to break out of this range yet, said Victor Shum, an energy analyst with Purvin & Gertz in Singapore. The overall market trend is still upward. There are still many supply side concerns that will continue to support prices at high levels.
Oil derivatives have also swung wildly, with gasoline punishing drivers at the pump.
A pre-lunch sell-off yesterday on the NYMEX segued into a post-lunch shortcovering rally, said trader and analyst Stephen Schork in his daily Schork Report, noting that in the case of gasoline, a 9.66 cent loss in the morning morphed into a 6.02 cent gain by the close.
Gasoline futures traded at $3.4743, down by nearly 5.17 cents over Thursday s close.
At the gas pump, the price for an average national price for a gallon of regular rose to a record $4.066 overnight, from $4.06 a day earlier, according to AAA and the Oil Price Information Service. Diesel also set a new record, rising 0.2 cent to $4.796 a gallon.
Oil prices shot higher Thursday on reports that Nigeria s state-owned oil company will take over oil operations in parts of the country from a Royal Dutch Shell PLC joint venture, sparking fears it may cut output.
Nigeria, Africa s top oil producer, is a major US oil supplier. Its output has already been significantly curtailed by years of militant violence.
In other Nymex trading, July heating oil futures slipped by 5.1 cents to $3.8917 a gallon, and July natural gas futures dipped by more than 15 cents to $12.641 per 1,000 cubic feet.
In London, July Brent crude lost $1.94 to sell for $134.15 on the ICE Futures exchange. -Associated Press Writers George Jahn in Vienna, Austria, and Eileen Ng in Kuala Lumpur, Malaysia, contributed to this report.
