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June 2007

News & Media

Oil Prices Surpass $67 a Barrel 
June 18, 2007 

SINGAPORE – Oil prices rose Friday to a nine-month high on worries the U.S. refining industry can’t meet peak summer gasoline demand, signaling a long summer ahead for drivers and fuel retailers.

The U.S. Energy Department reported Wednesday that refinery utilization fell last week, and that gasoline inventories did not grow. “The thing about those numbers is everybody knew that they (were) going to be struggling to keep up with gasoline demand as it was ... but they didn’t seem to make any progress refining-wise,” said Tobin Gorey, a commodity strategist with the Commonwealth Bank of Australia in Sydney, to the Associated Press.

Refinery utilization, which had been expected to grow by 0.8 percent, fell 0.4 percent to 89.2 percent, the second straight weekly decline, according to the Energy Information Administration. Most analysts say refineries should be using 94 percent to 95 percent of their capacity at this time of year.

“They’re having trouble keeping (refinery) capacity use up ... it should be high and rising,” Gorey said.

Gorey said market participants are also concerned over whether OPEC will raise output levels later in the year to meet winter demand in the Northern Hemisphere.