(Updates prices, adds byline)
By Matthew Robinson
NEW YORK, April 7 (Reuters) - Oil rose nearly $3 on Monday
to past $109 a barrel as a fire at a European refinery stirred
fresh fuel supply concerns.
Finnish refiner Neste Oil said repairs and maintenance on a
diesel unit at its 200,000-barrel-per-day (bpd) Porvoo refinery
would stretch through May following a fire on Friday.
The news pushed prices for London gas oil, a distillate
fuel closely related to diesel and heating oil, to a record
$1,005 a tonne and led U.S. heating oil and crude prices
sharply higher on the New York Mercantile Exchange, dealers
said.
"It's the gas oil situation in Europe that's pushing up
NYMEX heating oil," said Tom Knight, a trader at Truman Arnold.
"Distillate prices there have shot up amid refinery maintenance
and a fire at Neste's Porvoo refinery in Finland."
U.S. crude <CLc1> settled up $2.86 to $109.09 a barrel
after touching $109.48 earlier in the day. London Brent crude
<LCOc1> settled $2.24 higher at $107.14 a barrel.
Diesel is widely used in Europe as a motor fuel, and global
demand for diesel is rising significantly more quickly than
that for gasoline, analysts have said.
U.S. Energy Secretary Sam Bodman said he hoped oil cartel
OPEC would ramp up production to help motorists as the world's
top consumer nears the summer driving seasons with prices near
the all time high of $111.80 a barrel hit on March 17.
[]
"I have repeatedly asked that there be an increase," Bodman
said. "They have so far chosen not to do it. I remain
optimistic."
OPEC Secretary General Abdullah al-Badri insisted the
market was well-supplied and that the producer group was not
under pressure to raise output.
"Oil supply to the market is enough and high oil prices are
not due to a shortage of crude but rather it is because of the
decrease in the dollar's value, shortage of refinery capacity
and some political tensions in the world," Badri was quoted as
saying by Iran's official IRNA news agency. []
Bodman warned U.S. consumers, already showing signs of
curbing driving habits amid high energy costs and the wider
economic crisis, could face $3.50 a gallon gasoline at the pump
this summer.
Giant oil consumer China agreed to grant a hefty tax rebate
on crude imports to help its oil firms limit heavy refining
losses, while avoiding fuel price increases that would stoke
inflation, a government source said on Monday. []
The G7 group of industrialized nations meets in Washington
on Friday under pressure to come up with some solutions to
months of financial market turmoil that have raised the specter
of a worldwide economic downturn. []
Ships along the northern end of the Houston Ship Channel,
which feeds eight refineries in Houston and Texas City, were
stopped by dense fog on Monday morning, adding further support
to prices. []
A Reuters poll of analysts ahead of weekly U.S. inventory
data due out on Wednesday forecast crude stocks rose 2.2
million barrels in the week to April 4. Distillate stocks were
forecast to show a 1.4 million barrel draw, with gasoline down
2.6 million barrels.
(Reporting by Matthew Robinson, Gene Ramos and Robert Gibbons
in New York, Jonathan Leff in Singapore and Bate Felix and
Maryelle Demongeot in London; Editing by Marguerita Choy)
