Crude futures near record highs on supply worries

Crude oil prices were up on Monday. By mid-day in New York, West Texas Intermediate crude was up $1.08 to $61.65 per gallon for September contracts, but by the close of trade prices had fallen back a little for an even $1 gain on the day to $61.57 per barrel.

In London September delivery Brent crude on the International Petroleum Exchange ended the day up $1.07 to stand at $60.44 per barrel. Supply concerns grew after two refineries in the United States, one belonging to BP and the other to Murphys Oil, were hit by fires last week.

There were also production slowdowns at Valero’s refineries in Corpus Christi and St. Charles, as well as an explosion on an Indian drilling platform that raised concerns.

BP announced that it was shutting down one gasoline-producing unit at its Texas City plant, but it was unclear whether the closure was due to the explosion and fire there on Thursday.

All of these circumstances contributed to Monday’s rise in crude oil prices.

Also contributing to the price hikes was the announcement from Saudi Arabia that King Fahd had died, even though analysts and political experts all said that his death and the succession of Crown Prince Abdullah would have no effect on Saudi oil policies. The prince has been ruling Saudi Arabia on a de facto basis since King Fahd suffered a stroke in 1995.