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Price of oil continues to climb; ends at nearly $108 a barrel

Benchmark oil rose $1.55 to end at $107.83 per barrel on the New York Mercantile Exchange.

By CHRIS KAHN,
The Associated Press

2/23/2012

NEW YORK  — Oil prices continued to climb Thursday over concerns about supplies caused by a dispute over Iran's nuclear energy program. The European Union and the United States are using sanctions against Iran because they fear the country is developing a nuclear weapon. Iran denies the charge.

Benchmark oil rose $1.55 to end at $107.83 per barrel on the New York Mercantile Exchange. Heating oil increased 2.5 cents to $3.29 per gallon, gasoline futures rose 2.5 cents to $3.288 per gallon and natural gas futures fell 2.2 cents to $2.621 per 1,000 cubic feet.

A boom in North American shale drilling has filled underground storage facilities across the country. The Energy Information Administration says supplies are more than 40 percent higher than the five-year average.

Major natural gas producers recently cut back on production, as prices linger around a 10-year low. But analysts say they're not doing enough to reduce the glut.

"There's still an avalanche of gas available right now," said Gene McGillian, a broker and oil analyst at Tradition Energy.

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Meanwhile, the price of benchmark oil rose by 51 cents to $106.79 per barrel in New York. Brent crude lost 20 cents at $122.70 per barrel in London.

Oil has been rising on concerns that Iran will try to cut off more oil supplies to Europe ahead of a planned EU oil embargo in August. Such a move would temporarily tighten supplies as refineries search for alternative sources of crude. Iran was shipping about 18 percent of its crude exports to Europe, but many countries there have already scaled back or stopped buying Iranian oil entirely.

Retail gasoline prices jumped 3 cents to a national average of $3.61 a gallon, according to AAA, Wright Express and Oil Price Information Service. The national average is the highest ever for this time of year. A gallon of regular has already topped $4 in California, Hawaii and Alaska. Gasoline is nearly $3.90 per gallon in New York and Connecticut.

In other energy trading, heating oil was virtually unchanged at $3.28 per gallon and gasoline futures rose less than a penny to $3.09 per gallon.

The Trucker staff can be reached for comment at editor@thetrucker.com.

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