WTI trades above $65 per barrel

Crude oil was trading above $65 per barrel at midday in New York on Thursday, driven higher by continuing tensions between Iran and the west as well as by higher demand in the face of falling supply. Gasoline demand was at 9.2 million barrels last week, 1.6 percent higher than it was a the same time last year, according to a Wednesday report from the US Energy Information Administration. This means that even though inventories of gasoline in the US are at the high end of average for this time of year, analysts worry that supplies will be tight once the summer driving season begins.

Pump prices for gasoline are the highest they’ve ever been in March at an average of $2.620 per gallon, 12 cents higher than last year at the same time, according to AAA. There are predictions that the price for a gallon of gas could hit the $2.75 to $3.35 per gallon range by summer. Meanwhile, gasoline futures on the New York Mercantile Exchange were up 5.75 cents to $2.1147 by midday. May contracts for West Texas Intermediate crude were $1.64 higher, to $65.72, on Nymex.

Heating oil was 3.16 cents higher to $1.8590 per gallon by mid-session, while natural gas added less than one cent to $7.674 per 1,000 cubic feet. The slight gain in natural gas prices came even though inventories were down by 22 billion cubic feet last week to 1.511 trillion cubic feet.