Oil Rises Above $144 Amid Signs Fuel Supplies May Be Strained

Margot Habiby and Robert Tuttle
Bloomberg
June 3, 2008

Crude oil rose above $144 a barrel amid signs global demand for fuels, particularly from China, may strain supplies.

PetroChina Co. may import record volumes of petroleum products this year to meet demand needed for reconstruction after an earthquake, China National Petroleum Corp. said June 28, and to prepare for the Olympics. Heating oil futures, a proxy for distillate fuels including diesel, rose to a record today.

“There’s a kind of expectation in the market that there will be strong ongoing demand for distillate fuel,” said Tim Evans, an energy analyst for Citi Futures Perspective in New York. “We had the Chinese earthquake, and we’ve got the Olympics coming up.”

Crude oil for August delivery rose $1.15, or 0.8 percent, to $144.72 a barrel at 12:43 p.m. on the New York Mercantile Exchange. Futures earlier touched $145.85, the highest since trading began in 1983.

The May 12 earthquake in China’s Sichuan Province, the country’s biggest in 58 years, killed more than 69,000 people. The Olympic Games will be held Aug. 8-24 in Beijing.

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