The surge in crude oil prices continued Friday as futures reached $27 a barrel on the New York Mercantile Exchange for the first time since 1991.
After a more than $2-a-barrel gain in the past week, oil now appears increasingly poised for a move on $30 by year's end -- a level that, if sustained, likely will bring sharply higher prices for gasoline, airline tickets and shipped products.Natural gas futures, meanwhile, fell to an eight-month low on forecasts for a mild winter in much of the United States.
Oil rocketed higher in a late-session rally, hitting a high of $27, before settling at $26.56, up 76 cents for the day.
Comments from Mexico's oil minister suggesting concern about high prices put only a temporary damper on a market that remains bullish because of lowered OPEC production levels that are eating away at world supplies.
It was the last day of trading on the near-term contract, oil for December delivery. But analysts said the latest surge may have happened anyway in a buyers' market.
"It just closed very strong -- there's really no specific reason," said Bill O'Grady, energy analyst for A.G. Edwards & Sons in St. Louis.
"It's just more of the same," he said. "Inventories are really tightening up, and a good chunk of this is tied to Y2K concerns. We just think prices are going to go up from here."
December heating oil rose 1.54 cent to 68.05 cents a gallon, and December unleaded gasoline rose 1.78 cent to 73.15 cents a gallon.
December natural gas fell 6.2 cents to $2.434 per 1,000 cubic feet after the National Weather Service said warmer-than-usual weather is expected this winter from the southwestern United States to the Atlantic Coast and from southern New England to the southern tip of Florida. In addition, temperatures for the highest-demand U.S. regions -- the Northeast and the Midwest -- are expected to be above average this weekend.