NEW YORK - Oil rose above US$94 per barrel for the first time since May yesterday, buoyed by hopes for economic stimulus and worries about supply disruptions
Traders waited to see if a tropical storm could affect some of Mexico's crude production. There were also concerns about supplies from the Middle East after two pipelines carrying Iraqi crude to world markets were shut down, while rebels continued to battle government forces in Syria's largest city.
In New York, benchmark US crude increased US$1.47 to finish at US$93.67 per barrel. It rose as high as US$94.42 earlier. Brent crude, which is used to price international varieties of oil, rose US$2.45 to end at US$112 per barrel, in London.
Oil prices also benefited from expectations that Europe, the US and China will take fresh steps to promote economic growth, thereby boosting demand for oil. A rally in global stock markets also persuaded investors to buy riskier assets like commodities.
Meanwhile, analysts expect drivers on the West Coast of the US to soon pay more for gas after a fire shut Chevron's big Richmond refinery.
Chevron closed the refinery near San Francisco after a fire broke out Monday. There is no immediate word on when it will reopen. The refinery accounts for about 10 per cent of all refining capacity on the West Coast and primarily produces gasoline.
Motorists should expect to soon see pump prices average more than US$4 per gallon (US$1.05 a litre) along the West Coast, said Tom Kloza, chief oil analyst at Oil Price Information Service. The average price for a gallon of regular in California was US$3.86 on Tuesday.
Authorities say Tropical Storm Ernesto could intensify into a hurricane and has the potential of moving into the Bay of Campeche, which houses two of Mexico's oil production areas. Mexico was the seventh-largest oil producer in the world in 2010 and the third-largest exporter to the US last year, according to the Energy Information Administration.
Other tropical storms also are beginning to form that could affect oil tankers delivering supplies to the US.
"People have to realise it doesn't necessarily have to take a major storm to slow down imports into the Gulf Coast," Price Futures Group oil analyst Phil Flynn said.
In other trading on the New York Mercantile Exchange:
— Wholesale gasoline rose 6.91 cents to finish at US$2.9913 per gallon.
— Heating oil rose 5.71 cents to end at US$2.9980 per gallon.
— Natural gas rose 5.6 cents to finish at US$2.9640 per 1,000 cubic feet.