Oil prices closed above $109 US a barrel Friday on fresh concerns about Iran's nuclear program and despite evidence that demand remains weak.
Retail prices in Canada and the U.S. also rose.
Crude for April delivery closed at $109.77 a barrel in New York, up $1.94.
Iran has rapidly ramped up production of higher-grade enriched uranium over the last few months, the UN nuclear agency said Friday in a confidential report that feeds concerns about how quickly the Islamic republic could produce an atomic bomb.
The International Atomic Energy Agency report also said Iran failed to give a convincing explanation about a quantity of missing uranium metal. Diplomats say the amount unaccounted for is large enough to be used for experiments in arming a nuclear missile.
Iran insists it is not interested in nuclear weapons and says its activities are meant either to generate energy or to be used for research.
Earlier, U.S. Treasury Secretary Timothy Geithner said in a television interview on CNBC that the administration is considering what circumstances would justify tapping into the country’s strategic oil reserve.
"There is a case for the use of the reserve in some circumstances, and we will continue to look at those and evaluate that carefully," Geithner said.
Some Democrat congressmen have urged the release of some of the country’s oil stockpiles to combat high gasoline prices.
The average price for regular in Canada reached $1.26 a litre Friday, according to price-tracking website GasBuddy.com, up almost 10 per cent from a year ago. The site reported average prices that ranged from $1.10 in Edmonton to $1.40 in Vancouver.
In the U.S., the national average jumped by nearly 12 cents per gallon in a week, with state averages above $4 per gallon in California, Alaska and Hawaii.
It looks prices will keep climbing.
Tom Kloza, publisher and chief oil analyst at Oil Price Information Service, said U.S. pump prices will add at least 10 to 15 cents per gallon in coming days to reflect a recent jump in wholesale markets. The national average will likely peak in late April, Kloza said, rising as high as $4.25 per gallon.
Economists are voicing concern that a continuing run-up in oil prices could threaten the fragile economic recovery in the U.S. and deepen a recession in Europe.
The rise will weigh on the economy, pushing leisure and business travel costs higher. Every a one-cent increase in the price of gasoline costs the U.S. economy $1.4 billon, analysts say.
Prices have been surging particularly on the West Coast where a BP refinery was shut down after a fire. That refinery in Blaine, Wash., is the third-largest on the West Coast with a production capacity of 230,000 barrels per day.
The fire comes at a tough time for the refining industry. Most refiners are already slowing production to get ready for a switch over from winter to more expensive summer fuel blends. The seasonal switch usually creates a temporary dip in supplies that pushes prices higher at this time of year. The loss of the BP refinery could make that dip even deeper.
The North American benchmark, Light Sweet Crude, peaked near $114 a barrel last May. It was $75 in October
Oil prices closed above $109 US a barrel Friday on fresh concerns about Iran's nuclear program and despite evidence that demand remains weak.
Retail prices in Canada and the U.S. also rose.
Crude for April delivery closed at $109.77 a barrel in New York, up $1.94.
Iran has rapidly ramped up production of higher-grade enriched uranium over the last few months, the UN nuclear agency said Friday in a confidential report that feeds concerns about how quickly the Islamic republic could produce an atomic bomb.
The International Atomic Energy Agency report also said Iran failed to give a convincing explanation about a quantity of missing uranium metal. Diplomats say the amount unaccounted for is large enough to be used for experiments in arming a nuclear missile.
Iran insists it is not interested in nuclear weapons and says its activities are meant either to generate energy or to be used for research.
Earlier, U.S. Treasury Secretary Timothy Geithner said in a television interview on CNBC that the administration is considering what circumstances would justify tapping into the country’s strategic oil reserve.
"There is a case for the use of the reserve in some circumstances, and we will continue to look at those and evaluate that carefully," Geithner said.
Some Democratic congressmen have urged the release of some of the country’s oil stockpiles to combat high gasoline prices.
The average price for regular in Canada reached $1.26 a litre Friday, according to price-tracking website GasBuddy.com, up almost 10 per cent from a year ago. The site reported average prices that ranged from $1.10 in Edmonton to $1.40 in Vancouver.
In the U.S., the national average jumped by nearly 12 cents per gallon in a week, with state averages above $4 per gallon in California, Alaska and Hawaii.
It looks as if prices will keep climbing.
Tom Kloza, publisher and chief oil analyst at Oil Price Information Service, said U.S. pump prices will add at least 10 to 15 cents per gallon in coming days to reflect a recent jump in wholesale markets. The national average will likely peak in late April, Kloza said, rising as high as $4.25 per gallon.
Economists are voicing concern that a continuing run-up in oil prices could threaten the fragile economic recovery in the U.S. and deepen a recession in Europe.
The rise will weigh on the economy, pushing leisure and business travel costs higher. Every one-cent increase in the price of gasoline costs the U.S. economy $1.4 billon, analysts say.
Prices have been surging particularly on the West Coast where a BP refinery was shut down after a fire. That refinery in Blaine, Wash., is the third largest on the West Coast with a production capacity of 230,000 barrels per day.
The fire comes at a tough time for the refining industry. Most refiners are already slowing production to get ready for a switch over from winter to more expensive summer fuel blends. The seasonal switch usually creates a temporary dip in supplies that pushes prices higher at this time of year. The loss of the BP refinery could make that dip even deeper.
The North American benchmark, light sweet crude, peaked near $114 a barrel last May. It was $75 in October
Some analysts expect economic sanctions by the U.S. and Europe and countermeasures by Iran will help keep crude prices elevated this year.
The gain came despite the U.S. Energy Information Administration report Thursday that crude inventories rose by 1.6 million barrels last week and that oil demand has dropped 6.7 per cent from a year ago.
"The ability of crude to post new highs in the face of what appeared to be a bearish EIA report attests to the underlying strength of this price advance," energy trader and consultant Ritterbusch and Associates said in a report.
"The oil market has evolved into somewhat of a self perpetuating cycle in which new highs beget new buying that forces new highs."
Analysts say any lack of a resolution to the tensions over Iran could push prices still higher.
"There is a relatively high and growing probability to a scenario in which there is no resolution in 2012, in which oil prices grind higher along with a gradual escalation of tension," Barclays Capital said in a report.
Analysts also noted that escalating prices seemed linked more to speculation about possible future supply deficits than any actual shortages. Suspicions about rising stockpiles of oil stored on ships at sea were also clouding the true level of available supplies.
"In our view, the recent price increase was predominantly based on expectations and concerns, amplified by renewed inflows of money into the exchanges," said a report from JBC Energy in Vienna.
"Only a minor share appears to be due to physical activity, which at the margin — and this is crucial — is taking barrels out of the market and not consuming them."
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