WASHINGTON -- Crude oil futures leapt by almost $2 a barrel yesterday, testing the upper-end of a recent trading range amid strong demand and worries about supply from Iran and Nigeria.
The reported possibility of a labor strike in Norway, a major oil producer, contributed to the market's jitters. There was also some technical buying, brokers said, whereby traders who had anticipated lower prices had to cover their bets by purchasing crude.
Light sweet crude for May delivery rose $1.91 to settle at $66.07 a barrel on the New York Mercantile Exchange, where oil futures are 22 percent higher than a year ago. May Brent crude on London's ICE Futures exchange rose 74 cents to $64.35 a barrel.
Gasoline futures rose 5.57 cents to $1.8845 a gallon, while heating oil futures rose 4.66 cents to $1.8277 a gallon. Natural gas futures rose 14.7 cents to $7.214 per 1,000 cubic feet.
''It's a demand driven market. It's what the market is willing to bear," said James Cordier, president of Liberty Trading in Tampa, Fla., noting that US oil supplies are at multiyear highs.
The market is also gripped by concerns about supplies from Nigeria and Iran, and growing anxiety about the next hurricane season in the Gulf of Mexico. Some analysts believe gasoline prices could climb as high as $3 a gallon this summer, though that assumes some significant disruptions at refineries or difficulty in getting fuel to markets. The average nationwide pump price is currently $2.50.
Dow Jones Newswires reported yesterday that Norway's largest private industry union, Fellesforbundet, threatened to strike on Saturday if there is no settlement with the Federation of Norwegian Industries over pensions and wages.
The strike would affect 38,000 members in the manufacturing industry, including Norway's shipyards, engineering industry, and manufacturing for offshore oil and gas projects. The strike would not affect offshore oil and gas production, Dow Jones said.
Iran, the number two oil producer in OPEC, also remains a potential source of concern. It has been referred to the UN Security Council over fears it may want to misuse its nuclear program to make weapons, but the council has been at loggerheads over US-led efforts to ratchet up the pressure on Tehran.