Hemi Energy Group Inc. (fka HMGP)

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Oil price news............

Oil Prices Climb Above $62 a Barrel
March 2, 2007, 5:43AM
By GEORGE JAHN Associated Press Writer
© 2007 The Associated Press


VIENNA, Austria — Oil prices rose Friday on worries over tightening gasoline supplies, and perceptions that production cuts by the Organization of Petroleum Exporting Countries were starting to take effect.

Light, sweet crude for April delivery rose 21 cents to $62.21 a barrel in electronic trading on the New York Mercantile Exchange by noon in Europe.

On Thursday, the contract rose 21 cents to settle at $62.00 a barrel _ its highest settlement price since Dec. 22 _ following a rally in gasoline futures, which rose on reports of a glitch at a Valero Energy Corp. refinery. Valero said operations at its Port Arthur, Texas, refinery were normal, despite the reported outage of a unit.

Brent crude for April gained 37 cents to $62.48 a barrel on the ICE Futures exchange in London.

Analysts said worries over Iran's persistent refusal to suspend its nuclear program were also a factor.

"There's a lot of focus on what's happening with Iran. Tensions over any possible sanctions are obviously positive for oil prices," said Andrew Harrington, an analyst with ANZ Global Natural Resources in Sydney.

Washington is pushing for tougher U.N. sanctions on Tehran over its failure to comply with demands to halt its uranium enrichment program that the West fears could be used to build a nuclear weapon. Although the United States has said it has no plans to strike Iran militarily, it has also refused to rule out any option.

Vienna's PVM Oil Associates attributed part of the recent increase in crude prices to OPEC's production management policy.

"OPEC's decision to cut production by 1.2 million barrels a day from November 2006 ... and a further cut of 500,000 barrels a day from February 2007 ... has been a major contributor to the (upward) price reversal," said PVM, estimating that about 66 percent of the February reduction targets were being implemented.

Market participants were also focusing on the outlook for gasoline supply entering the peak spring and summer driving season. Problems at U.S. refineries have reduced output and cut into petroleum product supplies.

On Wednesday, the U.S. Department of Energy reported that stockpiles of gasoline and distillates, which include heating oil and diesel fuel, dropped last week by a larger amount than analysts had forecast. Meanwhile, demand for products over the last four-week period rose by 7.5 percent from the same period last year.

U.S. crude inventories climbed 1.4 million barrels to 329.0 million barrels last week. But gasoline inventories fell by 1.9 million barrels to 220.2 million barrels, and distillate inventories fell by 3.8 million barrels to 124.5 million barrels.

Heating oil futures gained half a cent to $1.7814 a gallon while natural gas prices added 1.7 cents to $7.305 per 1,000 cubic feet.

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Associated Press Writer Gillian Wong in Singapore contributed to this report.

http://www.chron.com/disp/story.mpl/ap/fn/4596110.html