Refinery outage in Venezuela

Gasoline futures were last at $1.708 a gallon, up 2.7%, or 4.49 cents, after trading as high as $1.713 a gallon.

The Associated Press reported that the processing units at the giant Amuay oil refinery were shut down after a power failure. Petroleos de Venezuela S.A., or PDVSA, said it shouldn’t take more than a week for the refinery to begin operating fully again.

The Amuay refinery is part of the Paraguana refining complex, which also includes the Cardon refinery. The complex has the capacity to process 940,000 barrels of crude-oil a day, but usually produces around 700,000 barrel a day, the AP said.
According to the reporting arm of the Energy Department, Venezuela net oil exports in 2003 were about 2.5 million barrels a day, 1.39 million of which were sent to the U.S. That figure does not include the barrels shipped to the Caribbean, refined there and then transported to the U.S.

Also on the Nymex, May crude-oil futures added 2.3%, or $1.25, to $56.65 a barrel, still feeding off a controversial forecast warning of $100-plus oil. May heating oil was up 1.7%, or 2.79 cents, at a record $1.644 a gallon.

“The reason for the move higher is clear,” said Kevin Kerr, president of Kerr Trading International. “The Goldman Sachs analyst report signaling $105 crude jolted the market.

“Clearly, the oil market is bullish in the long term. However, to suggest that it will happen in some mythical ’super spike’ right around the corner is pure fantasy.” See more on Goldman Sachs note.

Kerr suggested that Goldman’s large position in energy derivatives may have prompted the report.

“That may be more the motivation of this story and account for the timing of it as the oil prices were correcting a bit,” he said.

Edward Meir at Man Energy, part of Man Financial, said an Economist Intelligence Unit report predicting strength in metal and oil prices for the remainder of the year also provided a boost.

In other news, the Organization of Petroleum Exporting Countries postponed its June meeting for a week, due to a lack of available hotel rooms in Vienna, according to the Associated Press. The cartel rescheduled the meeting for June 15.

May natural gas was up 4.7 cents at $7.70 per million British thermal units.

“Encouraged by gains in the petroleum complex and technical follow-through buying, Nymex May natural gas surged to new contract highs despite a neutral weekly inventory report and fairly mild weather that has slowed demand,” said Mike Fitzpatrick, energy analyst at Fimat. He added that the downside to prices could be limited as long as crude remains above $50 a barrel.

In the energy sector, oil and gas stocks continued to rally. The Amex Natural Gas Index (XNG: news, chart, profile) was up 1.4% at 331.48 points. See Energy Stocks.

Lisa Sanders is a reporter for MarketWatch in Dallas.

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