Oil prices up on hopes for US holiday demand

Crude oil prices were higher Monday on hopes that Americans will ignore the bad economy and take to the roads over the upcoming Memorial Day long holiday weekend.

West Texas Intermediate crude for June added $2.69 to $59.03 per barrel on the New York Mercantile exchange, and with June contracts expiring at the close of trade tomorrow, crude oil for July delivery added $2.59 to $59.59.

Meanwhile, Brent crude was up $1.97 to $57.95 per barrel on the ICE Futures Europe exchange in London.

Nymex June gasoline futures added 8 cents to $1.76 per gallon in afternoon trade, but some analysts believe that gasoline futures, which have seen gains recently, will start to fall as soon as refiners begin to ramp up production after spring closures for maintenance and even as the US summer driving season commences this weekend.

The US Energy Information Administration has forecast a gain of 3.7 percent in refinery output of gasoline this summer even as it also revealed that demand for gasoline in the US was down 1.2 percent in the four weeks ending May 8.

Analysts expect demand to keep falling as long as US unemployment continues to rise.

The decline in futures prices is not expected to help retail gasoline prices, which were up again overnight to $2.311 per gallon according to AAA, much, but pump prices are not expected to skyrocket to last year’s levels, either.

Nymex July heating oil added 6 cents to $1.51 per gallon while July natural gas was up fractionally, to $4.22 per million British thermal units.