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Oil Briefly Hits $76 a Barrel for First Time in 11 Months

Gas prices fell more than a cent overnight, and gas and oil futures closed mixed as investors tried to decipher a confusing picture of domestic gasoline production. Oil briefly hit $76 a barrel for the first time in 11 months.

Gas futures stalled a day after they rose 9 cents a gallon on a surprise decline in inventories that didn't square with higher refinery utilization levels and a lingering sentiment that gas prices have likely peaked for the season.

Jim Ritterbusch, president of Ritterbusch & Associates in Galena, Ill., called Wednesday's price jump an overreaction to the inventory data from the Energy Department's Energy Information Administration. He expects utilization levels will continue to grow as refineries return shuttered operations to service. That would translate to an inventory build next week.

"I think it's going back down," Ritterbusch said of gas futures and retail prices.

Gasoline futures for August fell 0.39 cent to settle at $2.1914 on the New York Mercantile Exchange after a volatile session. Prices rose almost 2.5 cents at one point and fell more than 3.5 cents at another.

Meanwhile, the national average price of a gallon of gas fell 1.1 cents overnight to $3.02, according to AAA and the Oil Price Information Service. Prices peaked at $3.227 in late May.

Retail gas prices typically lag futures prices, which have gyrated over the past week. Before Wednesday's rally, gas futures had tumbled more than 25 cents over five trading sessions on unexpectedly high inventory numbers released last week.

Light, sweet crude for August delivery jumped 87 cents to settle at $75.92 a barrel Thursday on the Nymex. Prices briefly touched $76 in a late session rally, but also traded as much as 42 cents lower earlier in the day. A front-month contract last settled over $76 a barrel on August 9.

London Brent crude rose 46 cents to $77.22 by 1724 GMT, closing in on last August's $78.65 all-time high. U.S. crude gained 32 cents to $75.37 a barrel.

Total declared force majeure on exports from its 220,000 barrel per day (bpd) Dalia oil field in Angola after a technical problem shut half its output.

The French firm said it expects to resume in the next day or two, but the disruption heightened concerns about supplies from OPEC's members in Africa. Output from Nigeria is down nearly 20%, or 547,000 bpd, due to militant attacks.

"Angola got (the oil rise) started, but the China GDP was very supportive," said Phil Flynn, analyst at Alaron Trading.

"The combination, with yesterday's data, is pushing prices higher," Flynn added. "Everybody is ratcheting up their demand expectations from where they were a few months ago."

Prices leapt Wednesday after U.S. inventory data showed refineries running harder in the week to July 13 and failing to build up fuel stocks.

August heating oil futures on the Nymex rose 0.93 cent to settle at $2.1143 a gallon, while natural gas advanced 17.8 cents to settle at $6.706 per 1,000 cubic feet. The EIA reported that natural gas inventories grew by 65 billion cubic feet last week, in line with analyst expectations.

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