Tags: Gas | Oil | Prices | Plummet

Gas, Oil Prices Plummet

Thursday, 07 April 2005 12:00 AM

On Wednesday the U.S. Energy Department said the supply of unleaded gasoline stood at 212.3 million barrels, or 5.5 percent higher than last year. However, gasoline demand remained healthy, up 2 percent from a year ago.

Tetsu Emori, chief commodities strategist at Mitsui Bussan Futures, said he expects high gasoline prices to persist as "people are accumulating inventories before the summer driving season."

The government report also showed that the nation's inventory of crude oil was 317.1 million barrels, or 8 percent higher than last year.

"U.S. oil demand is holding up well, and will help to support prices at lower levels," investment bank Barclays Capital said in a note. "There is ... nothing in the U.S. data to support another push up toward $60 yet."

Emori said the current oil market remains "highly exaggerated," and that if prices followed market fundamentals, they should hover around the low $40 range.

"Although demand still remains strong, supplies are normal, as seen from the U.S. reports," he said. "Even the current spare capacity is not that tight."

The U.S. Energy Information Administration significantly raised its forecast Thursday for gasoline and crude oil prices during the summer driving season, citing strong demand, tight refining capacity and new changes in gasoline specifications.

U.S. monthly average retail gasoline prices are seen peaking in May at a record high $2.35 a gallon, up from a $2.10 peak forecast in the EIA's previous monthly outlook.

U.S. benchmark crude oil prices are seen remaining above $50 a barrel for the rest of 2005 and 2006, the EIA said.

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On Wednesday the U.S. Energy Department said the supply of unleaded gasoline stood at 212.3 million barrels, or 5.5 percent higher than last year. However, gasoline demand remained healthy, up 2 percent from a year ago. Tetsu Emori, chief commodities strategist at...
Gas,,Oil,Prices,Plummet
261
2005-00-07
Thursday, 07 April 2005 12:00 AM
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