May 27, 2011 / 5:22 AM / in 8 years

U.S. oil ends up as gasoline soars pre-holiday

NEW YORK (Reuters) - U.S. oil prices regained their footing near the close to end slightly higher on Friday, finding support from gasoline futures, which soared in anticipation of higher demand this summer driving season.

An employee holds a gas pump to refill a car at a petrol station in central Seoul April 6, 2011. REUTERS/Lee Jae-Won

Gains were limited, however, as a plunge in U.S. home sales added to festering economic worries, erasing much of the day’s earlier gains sparked by a weaker dollar.

Gasoline futures rose for the sixth straight session, ahead of the summer driving season that kicks off with the long Memorial Day holiday weekend.

Industry data showed pending sales of existing U.S. homes fell more than expected in April to hit a seven-month low, dashing hopes for a recovery in the vital housing market.

The report capped the week’s series of disappointing news about the economy that has kept U.S. crude shackled near $100, after recovering from a $20 fall three weeks ago.

“The weak home sales data signifies the U.S. economy is sputtering rather than improving nicely,” said Gene McGillian, analyst, at Tradition Energy, in Stamford, Connecticut

“U.S. crude has hit over $100, but is having a hard time moving further up because of economic uncertainty,” he added.

U.S. crude for July delivery settled at $100.59 a barrel, up 36 cents. For the week, U.S. crude gained $1.10, or 1.12 percent.

In London, ICE Brent for July delivery settled at $115.03 a barrel, off 2 cents. For the week, Brent crude gained $2.64, or 2.35 percent.

Pre-holiday volume was light, with U.S. crude tallying 375,000 lots, 42 percent below the 30-day average, with about an hour left in the day’s trade.

Brent volume was about 270,000 lots, down 39 percent from the 30-day average.

Trading on the floor of the New York Mercantile Exchange will be closed on Monday. Electronic trading will proceed as usual, with a trading halt from 1:15 p.m. EDT (1715 GMT). Trading resumes at 6 p.m. EDT. The London market is closed for a bank holiday.

The shaky trajectory in oil prices all week has kept the Reuter-Jefferies CRG index .CRB, a global benchmark for commodities, modestly up 0.8 percent for a third week of gains. But the index was set to end the month down more than 7 percent after the plunge in many commodities in early May.

Oil futures were under pressure also as OPEC oil output was expected to have increased this month due to extra oil from Saudi Arabia, Nigeria and Iraq, according to a Reuters survey.

Supply from all 12 members of the Organization of the Petroleum Exporting Countries is expected to average 28.90 million barrels per day this month, up from a revised 28.79 million bpd in April, the survey of oil companies, OPEC officials and analysts found.


U.S. gasoline for June delivery RBM1 settled at $3.0920 a gallon, rising 4.37 cents, or 1.43 percent, the highest close since May 11. For the week, the contract gained 15.62 cents, or 5.3 percent.

Gasoline rose early on news of an overnight shutdown of three refineries in Texas City, Texas, due to a city-wide power outage.

By midmorning Friday, the refineries, which account for 4 percent of U.S. refining capacity, had restarted operations, after power was restored.

In late trading, the U.S. dollar was down 0.87 percent against a basket of major currencies, with the euro rising to cap off its best week since late April on comments that financially ailing Greece was likely to cope with its heavy debt. <USD/> .DXY

Investors kept watch over tensions in the Middle East and North Africa, especially after news that Russia was ready to mediate in the Libyan crisis following its partners in the Group of Eight.

On Thursday, data showed the U.S. economy expanded at an unrevised 1.8 percent annual rate in the first quarter, less than expected, while corporate profits shrank and weekly jobless claims rose, sparking oil’s decline of more than 1 percent.

Additional reporting by Alex Lawler and Zaida Espana in London; Editing by Marguerita Choy

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