LONDON – Crude oil futures rose to within a quarter of $50 a barrel Monday after a gas leak shut down a North Sea oil production platform and as traders weighed concerns about heating oil supplies against the fact that temperatures have been mild in recent weeks.
The oil minister of Saudi Arabia said Monday his country was working to raise its sustainable production capacity an additional 1.5 million barrels over the next few years in order to address growing demand worldwide.
Light, sweet crude for January climbed 32 cents to $49.76 a barrel on the New York Mercantile Exchange (search). The last time Nymex crude settled above $50 a barrel was Nov. 3. In London, Brent crude rose $1.18 to $45.75 on the International Petroleum Exchange (search).
Mike Fitzpatrick, a broker at Fimat USA Inc. (search) in New York, said there was "nothing new" pushing oil prices higher on Monday and that there was "not a terrible reaction" to the production snags in the North Sea because exports do not appear to be affected.
That said, there are lingering concerns about the nation's supply of distillate fuel, which includes heating oil and diesel, even though the weather has not been terribly cold in the United States in recent weeks.
"The weather has been relatively moderate and so everybody's looking to the inventory reports," he said, referring to the Energy Department's weekly petroleum supply report. The next report is scheduled to be released Wednesday.
As of Nov. 19, the nation's supply of distillate was 14 percent below year ago levels.
About 130,000 barrels a day of oil production was shut down by Statoil ASA (search) Monday after a gas leak was discovered, forcing the company to evacuate 180 workers from a North Sea platform. By late Monday afternoon, the leak had been contained, but officials did not immediately know how long it would be before oil output returned to normal.
The platform processes another 75,000 barrels a day from a nearby oil field, though it wasn't immediately clear if that oil would be rerouted and processed elsewhere.
There were also mild market jitters about the Dec. 10 meeting of OPEC ministers in Cairo to reassess their supply commitments.
Iran and Venezuela have hinted in the run-up to the Organization of Petroleum Exporting Countries' (search) next session that members could trim their record 30 million barrel a day supplies to prevent crude prices spiraling lower after months of higher output.
Saudi Arabia's oil minister Ali Naimi said Monday that the "fear factor" over supplies has added $10 to $15 a barrel to the price of oil and reiterated that his country is working toward lifting its sustainable oil production capacity.
Crude prices have also been pushed higher in recent months on concerns that operations at Yukos, Russia's top producer, could be disrupted by a continuing tax dispute with authorities.
There are also recurrent fears that the sabotage of oil pipelines in U.S.-occupied Iraq could hit supplies at a time when there's little spare production capacity worldwide.
Crude futures reached a peak settlement price of $55.17 a barrel twice in late October. Prices would have to surpass $90 per barrel, adjusted for inflation, to match those set in 1980.
Heating oil for December delivery was down less than a penny at $1.4437 per gallon on Nymex, where gasoline futures edged up less than a penny to $1.3029 per gallon.
Natural gas futures fell 80.4 cents to $7.837 per 1,000 cubic feet.