Oil Extends Up Streak to 7th Day, Settles at $62

U.S. crude oil futures ended higher for the seventh session in a row on Thursday as gasoline futures rallied amid refinery snags and shrinking supplies.

On the New York Mercantile Exchange, April crude settled up 21 cents, or 0.3%, at $62 a barrel, after slipping in the midday lull. It was the highest settlement since Dec. 22, when crude prices ended at $62.41.

April crude traded from $60.80 to $62.40, the highest level since prices hit $63.20 on Dec. 26.

From Jan. 18, when prices dropped as low as $49.90, crude prices have risen more than $12, or 25%.

In London, ICE April Brent crude ended up 22 cents or 0.4% at $62.11 a barrel, trading from $61.05 to $62.74.

In New York, NYMEX April RBOB gasoline settled up 3.63 cents, or 1.9%, at $1.9101 a gallon, the highest settlement since Aug. 22, 2006, when prices ended at $1.9807.

The contract rose to an intraday high of $1.917, the highest since prices hit $1.9565 on Aug. 23. Its session low was $1.86.

Gasoline futures have risen along with crude oil, gaining 58 cents, or 44%, from Jan. 18.

"The market is choppy after an early rise was supported by a rise in gasoline, which is up on refinery problems and strong demand," said Andrew Lebow, a broker at Man Financial in New York. "But the energy markets are keeping a wary eye on the stock markets."

The U.S. stock market was lower, but well above the day's lows, after surprisingly strong U.S. manufacturing data on Thursday brightened prospects for the world's largest economy.

The day's gasoline rally was sparked by news that Valero Energy had reduced the amount of crude processed at its 325,000 barrel per day refinery in Port Arthur, Texas, after a problem with a coking unit, traders said.

"Refinery problems such as this, and a stabilizing equities market, has given the oil markets support ... had it not been for the troubles in Shanghai and other markets, oil markets could have been higher, given the rise in gasoline demand against the backdrop of refinery snags," said Phil Flynn, analyst at Alaron Trading in Chicago.

In other refinery news, Exxon Mobil was restarting Hydrocracker No. 1 as it wraps up a two-week overhaul on the unit at its 563,000 bpd refinery in Baytown, Texas, according to a regulatory filing. The controlled restart was expected to last through March 3.

Several other refinery troubles have been reported in recent days, fueling supply concerns ahead of the U.S. summer driving season.

In the week to Feb. 23, U.S. gasoline stocks fell for the third straight week, by 1.9 million barrels to 220.2 million barrels, data from the U.S. Energy Information Administration, statistical arm of the Department of Energy showed.

Crude oil inventories rose 1.4 million barrels to 329 million barrels while distillate stocks, which include heating oil and diesel fuel, fell 3.8 million barrels, to 124.5 million barrels.

NYMEX April heating oil was sluggish, ending down 0.18 cent, or 0.1 percent, at $1.7763 a gallon, after moving from $1.7428 to $1.7957.

Midmorning, the EIA said U.S. storage of natural gas fell by 132 billion cubic feet, less than a forecast for a drawdown of 143 bcf in a Reuters poll of analysts.

The Organization of Petroleum Exporting Countries is meeting mid-month to chart production policy.

Another output cut by the group, after having agreed to cuts totaling 1.7 million bpd, would be unfortunate, International Energy Agency Executive Director Claude Mandil said, adding he was concerned about high oil prices.

Meanwhile, OPEC oil exports, excluding new member Angola, were expected to rise by 210,000 bpd in the four weeks to March 17, according to Roy Mason of consultants Oil Movements.