THE WALL STREET JOURNAL: Oil and Gas Prices Hit Records Following Trouble at Refineries: "Refinery outages have lifted gasoline futures more than 10% in the past two weeks. In the latest, a gasoline-producing unit at Motiva's Norco, La., refinery was shut Thursday and was in the process of restarting Friday. Motiva is a joint venture between Royal Dutch Shell PLC and Saudi Aramco.": Monday 8 August 2005
By MASOOD FARIVAR Fresh news of trouble at U.S. refineries added to worries about summertime supplies and sent crude-oil and gasoline prices to record high settlements Friday. The September crude-oil contract on the New York Mercantile Exchange jumped 93 cents to $62.31 a barrel, the highest settlement since the contract began trading in 1983. Friday's strong close suggests the market is poised to set fresh record highs this week, said Chris McCormack, a technical analyst and broker at brokerage firm ABN Amro. A breach of last Wednesday's intra-day high of $62.50 could send the contract to $63.40 "at a minimum." The September gasoline contract settled at an all-time high of $1.8322 a gallon, a rise of 2.99 cents. Refinery outages have lifted gasoline futures more than 10% in the past two weeks. In the latest, a gasoline-producing unit at Motiva's Norco, La., refinery was shut Thursday and was in the process of restarting Friday. Motiva is a joint venture between Royal Dutch Shell PLC and Saudi Aramco. Operational problems aren't uncommon at refineries, but an unusually high number of outages has cropped up this year, a development some analysts chalk up to refiners' need to run flat out to meet rising oil demand. The outages involve units at 10 refineries that together have the capacity to run 2.1 million barrels a day of oil, or 12% of total U.S. capacity. "The path of least resistance is to the upside, and nobody wants to go home with any kind of exposure," said Mike Fitzpatrick, vice president at brokerage firm Fimat USA in New York. "Demand is way high, and anything that takes away from supply, like a refinery outage, is going to have a deleterious effect on prices." Natural-gas futures gained 22.9 cents to settle at $8.70 per million British thermal units, a nine-month high, helped by the rise in crude oil as well as concerns that heavy electricity demand is eating into gas available for winter storage. In other commodity markets: SOYBEANS: Futures on the Chicago Board of Trade ended sharply lower but well off earlier lows as pre-weekend position-squaring trimmed an early plunge. The November contract ended 13½ cents lower at $6.69 on technical selling and fund liquidation. Forecasts of rain in some U.S. Midwest growing areas helped to pressure prices. ORANGE JUICE: Futures at the New York Board of Trade ended sharply higher, continuing a technical bounce on speculative buying and buying back of previously sold positions. Traders were also watching a tropical storm that could head toward Florida orange groves. The Most-active September contract settled 85 points higher at 97.95 cents a pound. Write to Masood Farivar at masood.farivar@dowjones.com
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