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OIL AND GAS
Gas prices rise for 15th straight day
by Daniel J. Graeber
Washington (UPI) Feb 10, 2015


Oil prices tread water following recent increases
New York (UPI) Feb 10, 2015 - Crude oil prices were relatively flat early in the trading day Tuesday amid uncertainty over future movements and deflationary risks in China.

The price for the March contract for the global benchmark Brent was down only slightly from the previous session to trade at $58.25 early in the session. Oil prices overall remain flat for the second week of February, hovering around the $58.30 mark as traders assess what happens next in the crude oil market.

Oil prices are off by 50 percent from the June highs as markets swing toward the supply side amid growing U.S. oil production. The Organization of Petroleum Exporting Countries said in its February market report U.S. output was slowing at the same time that overall demand for crude oil was expected to rise.

Crude oil traders, OPEC said, are now feeling "bullish." Oil prices have shown double-digit growth in terms of percent since hitting a low-water mark in late January. Ian Taylor, chief executive officer at oil trading company Vitol Group, told Bloomberg News oil prices could slip back into negative territory, however, as U.S. crude oil stockpiles grow and production increases.

On the demand side, China's economic slowdown may be throttling momentum in crude oil markets. Nomura Securities in China said in a research note Tuesday "underlying disinflationary pressures have risen" in the leading economy.

The International Energy Agency's director, Maria van der Hoeven, said Tuesday the Paris-based group is not in the business of forecasting, but took note of the potential global economic impacts of lower oil prices.

"Low oil prices are normally seen as a boon to the economy and to oil demand growth," she said. "But it might not work out quite that way this time around."

The price for West Texas Intermediate, the U.S. benchmark, was down 1 percent early in the Tuesday session to trade near $52.20 per barrel.

The national average retail price for a gallon of regular unleaded gasoline in the United States has increased for 15 consecutive days, AAA data show Tuesday.

Oil prices in the United States were in a free fall last year and in early 2015, with the national average price flirting with the $2 per gallon mark. A national average price for Tuesday of $2.18 per gallon is about a penny more than Monday and 12 cents more than one week ago.

AAA notes gasoline prices usually turn the corner at the beginning of February as refineries enter a period of seasonal maintenance.

"Refineries usually schedule maintenance during the first several months of the year when demand is relatively low, which can lead to decreased production and supplies," the motor club explained in a Monday report.

Refineries are also preparing to make a summer blend of gasoline, which requires additional preparations to prevent vaporization during warmer months. That gasoline is more expensive to produce than the winter blend.

On the strike at U.S. refineries, led by the United Steelworkers union, AAA said not to expect any actual reductions in output because of the labor stoppage.

A brief from Patrick DeHaan, a market analyst with the price watchers at GasBuddy.com, said the national average price for gasoline saw its largest weekly advance since mid 2013. Last year's seasonal rally resulted in a 30 cent increase in the price at the pump from Feb. 8 through May 1.

"Gas prices are likely to rise across much of the U.S. this week as well, although the pace should be far more subdued than what we saw this week," he wrote Monday.

Gasoline prices are still relatively low. Tuesday's national average is about 3 cents less than one month ago and $1.11 less than this date in 2014.


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