Oil closes at $56.72; analysts say market wants to test $60 price

| 3/18/2005

For the sixth week, crude oil prices increased, closing at $56.72 Friday, March 18, in trading on the New York Mercantile Exchange.

Crude scheduled for delivery in April hit an all-time high Thursday, March 17, during intraday trading when the price went to $56.72 per barrel. That’s well over $1 per gallon because the barrels referred to hold 42 gallons – however, oil has not been shipped in individual barrels for decades.

Analysts didn’t seem surprised by the ever-rising prices this week. Even OPEC’s move to allow a second increase in production on Friday failed to stem the rising costs.

“We’ve been pricing in a supply shortfall in the second half of the year,” said Marshall Steeves, an analyst with Refco Group Inc. in New York who was interviewed by the Bloomberg news service. “The OPEC decision to raise quotas has been a bullish factor because of the diminished cushion of spare capacity.”

Friday’s closing price of $56.72 was 32 cents higher than the previous day. Bloomberg reported that crude prices rose 4.2 percent just this week. Friday’s price was 50 percent higher than the price this time last year.

“The market still wants to test $60 (per barrel),” said Justin Fohsz, a broker with Starsupply Petroleum Inc. in Englewood, NJ, during an interview with Bloomberg.