(London) Oil prices continued to surge higher, and analysts fear that supplies may not be able to meet the peak in demand this summer.
In London US light crude futures were up 43 cents to $67.50 per barrel.
"The failure to rebuild gasoline stocks in the month of April could result in drastic regional supply shortages in the coming months, and that concern is certainly being expressed in rising prices," said Fimat analyst John Kilduff. "The $70.85 high of last August 30 seemed like an anomaly after last year's storms. Now the confluence of events that constitutes the wall of worries that the market is climbing will shortly make that price a natural progression."
Gasoline inventories have dropped by 6.2 percent in the last five weeks, as reported in an Energy Department report released yesterday. Refineries are operating at 85.9 percent of capacity, down 1.1 percentage points from the previous week.
There is a lot of nervousness about gasoline after the huge decline in supplies after the last five weeks," said Rick Mueller, an analyst with Energy Security Analysis Inc. "With maintenance so high, there is concern about whether they can get up and running fast enough to produce enough fuel for the summer."
Some industry analysts believe that oil may hit $85 per barrel during the peak summer demand, which could send gasoline prices skyrocketing to $3.50 a gallon or more in the US.