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To: Think4Yourself who wrote (65620)	5/2/2000 4:41:00 PM
From: The Ox	Read Replies (1) \| Respond to of 95453

Updated Tue May 2 14:45 ET NYMEX Oil: Gasoline soars 5% on concern supplies are thinning By Peter Rosenthal, Bridge News New York--May 2--NYMEX gasoline futures soared more than 5% Tuesday as concern spreads that supplies are thinning before the busy summer driving season, pulling crude oil higher as well. At 1410 ET, Jun crude was up $1.01 at $26.88 per barrel. Jun gasoline rose 428 points to 87.55 cents per gallon, a 5-week, spot contract high. Jun heating oil was up 191 points to 69.35c. * * * The gains came before the release of weekly inventory data from the American Petroleum Institute, which are expected to show crude stocks dipped and gasoline stocks either remained flat or fell last week. "All of a sudden, they're getting nervous," said Phil Flynn at Alaron Trading in Chicago. "I think traders are starting to realize we have really tight supplies going into the summer." Cash prices for gasoline have risen sharply since Friday, when May futures expired, in most key U.S. markets. Some grades of gasoline prices at the U.S. Gulf Coast, the nation's largest refining center, gained 265 points to trade last at only a 50-point discount to Jun futures. In Los Angeles, cash deals for gasoline that meet the state's strictest air quality standards were at $1.08 per gallon Tuesday, up 6 cents. "The market was at the point where it seemed where we were extremely long gasoline," said a trader with a large domestic refiner and marketer. But recent refinery problems "sucked up quite a few o f the barrels. It seems we've got a bit short, I think everybody got a little bit complacent." The rally in crude oil comes amid mixed signals about production from OPEC. While traders await details on how many extra barrels OPEC added to the market in April. Kuwaiti and Qatari oil ministers on Tuesday said prices were performing within "the safe range," and agree that there was no current need to amend the OPEC output agreement. Venezuela Energy and Mines Minister Ali Rodriguez said Tuesday though that world oil markets will require an additional 600,000 barrels per day of OPEC production by September to meet this year's expected demand growth of 2.5 million bpd. While OPEC may decide at its June meeting to increase output again, he expects the group to wait until September to make such a move. Yet more OPEC barrels may come too late to satisfy refiners' thirst as they ramp up production before summer, when gasoline demand typically peaks. And last week's unexpected decline in gasoline stocks pierced a sense of security, brokers said. "No one really wants to be short with the stats coming out," a broker said. "They were looking for builds last week and what did they get." Brokers also said there will be less gasoline delivered under the expired May contract than some had anticipated. NYMEX said 1.45 million barrels of gasoline are intended to be delivered. "That has a little to do with it," a broker said. "There's decent volume going through, carry over from yesterday." Reformulated gasoline at terminals must now meet the Phase II summer requirements and there are some blenders and importers shying away from the product on fear that they will have to pay a duty to Unocal, which holds a series of patents on making cleaner gasoline. The patents, which were upheld by a federal court judge in March, originally were aimed at making California fuel, but may be applied to some reformulated gasoline. End