Friday, Aug. 19, 2005 | 9:37 a.m.
BUDAPEST, Hungary -- Oil prices rose more than $1 a barrel on today, bouncing back from a dip this week as markets reacted to a fire at a massive refining complex in Venezuela and developments in Ecuador, where protesters had forced a halt to production.
Bullish sentiment was also buttressed by news of explosions in the Jordanian Red Sea port of Aqaba and Israel.
Attackers fired at least three missiles from Jordan early today, with one narrowly missing a U.S. Navy ship docked in the port and killing a Jordanian soldier and another falling close to a nearby airport in neighboring Israel, officials said.
Meanwhile, markets remained wary over Iran's nuclear ambitions, with expectations that the situation could escalate, said Sandra Ebner, commodities analyst at Deka Bank in Frankfurt, Germany.
"I do expect to see new highs and I would not be too surprised to see oil prices breach $70 a barrel soon," Ebner said.
Light, sweet crude for September delivery gained $1.03 to $64.30 a barrel in electronic trading on the New York Mercantile Exchange.
The contract settled at $63.27 a barrel Thursday, ending four days of declines after reaching a new intraday high of $67.10 on Aug. 12. The September contracts expire Monday.
Gasoline rose more than three-and-a-half cents to $1.8985 a gallon, while heating oil rose about the same amount to $1.8270.
On London's International Petroleum Exchange, October Brent crude futures jumped $1.05 to $63.45 a barrel.
On-edge traders are monitoring world news closely, as any cut in production could be seen as eating into the world's already limited excess capacity.
"The oil market is possibly at that dramatic stage near the end of a big run, when price swings tend to be very dramatic, and the euphoria and panic levels are at extremes," said Dallas-based independent energy analyst Joe Duarte.
Markets were unsettled after news that a fire broke out late Wednesday at the Amuay refinery in Venezuela, slashing output from a usual 410,000 barrels a day to 150,000. The refinery is part of the Paraguana complex, one of the world's largest refining installations.
Output is expected to return to normal in 48 hours, Venezuelan officials said.
Also in Venezuela late Thursday, President Hugo Chavez said the state oil company intends to build three new oil refineries in coming years, and blamed lofty oil prices on geopolitical tensions.
Venezuela is the world's fifth-largest oil-exporting country, and holds the largest conventional oil reserves outside the Middle East.
In Ecuador, President Alberto Palacio said late Thursday that protests in two Amazon provinces had ground oil production in the Andean nation to a halt. Ecuador normally produces 202,500 barrels a day.
"Today Petroecuador production was zero barrels of crude," he said, adding that protesters had "destroyed oil installations, seized public goods (and) dynamited a pipeline."
Palacio said private companies operating in the northeast Amazon had also reported production losses of 328,000 barrels.
The violence came hours after President Alfredo Palacio's government declared a state of emergency late Wednesday in the Sucumbios province.
In Nigeria, hundreds of villagers in Nigeria closed down a Royal Dutch/Shell PLC pumping facility, angered over a compensation amount for an oil spill nearly two years ago.
Refinery blackouts in the United States pushed prices into new territory last week, but futures eased this week as traders took profits. Analysts said markets were calmed by the refineries coming back online and the end of the summer driving season.
But demand again is expected to pick up for the Northern Hemisphere winter, where jet fuel, heating oil and diesel become high-usage commodities.
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