Oil Reaches Record $58 on Concern OPEC Unable to Meet Gasoline Demand
e oil climbed to a record of more than $58 a barrel on concern that rising output from the Organization of Petroleum Exporting Countries may be inadequate to produce enough gasoline to meet a summer peak in U.S. demand.
On the New York Mercantile Exchange, crude for May delivery rose 78 cents, or 1.4 percent, to $58.05 a barrel at 12:17 p.m. London time, a record in more than two decades of futures trading. Oil has gained 69 percent in the past year.
OPEC, producer of about 40 percent of the world's oil, will this week discuss a second increase in output quotas in 2005, the group's president, Sheikh Ahmad Fahd al-Sabah, said April 2. U.S. refineries may lack the capacity to process additional low- quality oil from OPEC. Gasoline rose to a record for a third day.
``There seems to be a little bit of panic about gasoline despite relatively good stockpile levels,'' said Tony Machacek, a broker at Bache Financial Ltd. in London. ``It's good of OPEC to make a gesture to try to raise production, but they can only increase grades of crude that the market doesn't need.'' It's ``possible'' that prices will reach $60 this week, he said.
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