Oil Prices Rise Above $74 Per Barrel

Oil prices rose Friday, a day after the Venezuelan oil minister said OPEC was powerless to stop price surges caused by geopolitical tensions.

Fighting in the Middle East also made traders fearful of possible supply interruptions in the region, and a U.S. government report showed a surprising decline in natural gas inventories last week as hot weather pushed up demand for electricity.

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Light, sweet crude for September delivery was up 16 cents to $74.750 a barrel in midmorning Asian electronic trading on the New York Mercantile Exchange. Prices had closed above $74 Thursday on reports of militant attacks and a pipeline leak that disrupted production in Nigeria.

At London's ICE Futures exchange, Brent crude for September rose 32 cents to $75.33 a barrel.

In other Nymex trading Friday, gasoline futures remained steady at $2.2960 a gallon, while heating oil futures rose 0.75 cent to $1.9871 a gallon. Natural gas futures were up 4.5 cents to $7.168 per 1,000 cubic feet.

Late Thursday, Venezuelan Oil Minister Rafael Ramirez was quoted as saying that the world oil price band has "disappeared" as geopolitical tensions raise energy prices in a way that OPEC is powerless to stop.

Ramirez said he would be discussing oil prices with other members of the Organization of Petroleum Exporting Countries in Qatar, where some ministers are gathered for a natural gas conference, according to a transcript of an interview with Venevision television station.

Ramirez said they would discuss "the market situation, what is happening, how the situation in the Middle East is influencing the prices we're seeing, which I reiterate have nothing to do with and are out of the control of OPEC because they are fundamentally geopolitical problems."

He said the limits of worldwide refining capacity and of OPEC members to lift output made it difficult to counteract the surge in prices and suggested later to Latin American TV station Telesur that oil prices could reach $100 a barrel "given certain factors."

The market has recently been focusing on the Middle East, where more than two weeks of fighting between Israel and Hezbollah militants in Lebanon has raised fears that the tension could spill over into oil-producing countries of that region, notably Iran, OPEC's No. 2 supplier and a backer of Hezbollah.

Meanwhile, Shell Petroleum Development Co., a subsidiary of Royal Dutch Shell PLC, said militant attacks and a pipeline leak in Nigeria's oil-rich Niger Delta may prevent it from meeting its production obligations for July and August.

The volatile Niger Delta region has been the scene of frequent disputes between oil companies and communities that have for years demanded a greater share of the wealth of Africa's largest crude producer.

Adding to the market influences were the latest figures showing a robust U.S. oil market. In its weekly petroleum report Wednesday, the U.S. Energy Department said summer gasoline demand in the U.S. was almost 2 percent higher than last year despite $3-a-gallon pump prices — high by American standards.

Gasoline inventories fell last week by 3.2 million barrels to 211 million barrels, just 500,000 barrels more than last year.