Oil futures prices rocketed past the $20 a barrel mark Friday as the momentum that began building on Monday swept the market higher for the fifth consecutive day.
On the New York Mercantile Exchange, the April contract for West Texas Intermediate crude, the benchmark grade of U.S. oil, leaped 49 cents to a 19-month high of $20.33 a barrel in moderate trading.It was the highest level since Aug. 14, 1987 when crude prices were $20.57 a barrel, and capped a weeklong rally during which prices rose $1.83 a barrel from last Friday's close of $18.50.
Petroleum products, meanwhile, turned in a lethargic performance after a relatively strong week.
In trading on refined oil products Friday, prices of unleaded gasoline for April delivery declined 0.21 cent to 55.62 a gallon on the New York Mercantile Exchange and unleaded gasoline for April delivery fell 0.26 cent to close at 53.57 cents.
On Monday, the April contract for crude oil crossed a resistance level of $19 after seesawing across the $18 range the previous two weeks. From there, momentum drove the market, steered by a slew of reports pointing to a decline in available raw petroleum, traders said.
"This week had one piece of bullish news after another in a market that is technically strong," said James R. Fiedler, vice president in charge of energy brokering for E.D.&F. Man International Futures Inc.
The reports indicated: falling U.S. inventories; a tightening of crude oil supplies in the Gulf of Mexico, a major U.S. oil-producing region; problems in the North Sea that temporarily disrupted production at a large Norwegian oil complex; and sharp cutbacks by Saudi Arabia to Japan, Europe and the United States.
Traders said the strong showing on the April contract Friday was due largely to short covering - or buying to repay borrowed positions - in advance of the contract's expiration on Monday when many players will be out of the market for a national petroleum refiners conference.