Crude oil up more than $1 on refining concerns

Crude oil prices were up sharply on Thursday amid worries from several directions. Brent crude for July delivery added $1.27 to $71.21 per barrel on the Intercontinental Exchange in London, while July contracts for West Texas Intermediate crude gained $1.40 to $67.66 per barrel on the New York Mercantile Exchange.

While refineries are making 9.33 million barrels of gasoline per day despite utilization at just 89.2 percent last week, the continuing trend of refineries running at 6.4 percent below the five-year average has some analysts wondering if capacity was more damaged by Katrina and other hurricanes than was reported by refiners. Some analysts called the under-utilization a “disaster” for the industry.

Nymex gasoline July futures was up 5 cents, to $2.2065 per gallon. Meanwhile, Nymex July heating oil was 4.8 cents higher to $2.0102 per gallon as stockpiles were at 35.4 percent lower than last year at this time, prompting fears that there will not be enough supply for next winter.

Another sort of worry came with a warning from European governments that Iran could face more and broader sanctions if it continues to pursue its nuclear program and its refusal to cooperate with Western authorities in negotiations.