Surging oil futures prices, bolstered by a continuing strong demand for gasoline and diesel fuel--especially in preparation for the Memorial Day weekend--broke through the $16 barrier Friday for the first time since Valentine's Day.
Analysts said a shortness of supply of certain crude grades used to make distillates, such as gasoline, jet fuel and heating oil, was helping to support the recovery, along with technical market factors.
"The June contract is going to expire on Tuesday, but there is still a large short position that needs to be liquidated," said Andrew Lebow, an analyst at the Shearson Lehman Bros. securities firm.
Lebow said the combination of the heavy demand together with the shortage of domestic and foreign crude supplies helped to drive prices higher.
He also cited the rising seasonal demand for gasoline as the Memorial Day weekend approaches.
Peter Beutel, an analyst with Rudolf Wolff Futures, said the number of refinery runs to meet that demand is now at the highest point "since the weekend of Aug. 28, 1981."
On the New York Mercantile Exchange, contracts for June delivery of West Texas Intermediate, the benchmark U.S. crude grade, closed at $16.16 a 42-gallon barrel, up 48 cents from Thursday's settlement price.
The last time a near-month contract closed above $16 was Feb. 14, when the price settled at $16.01. It then dropped to hover at levels between $11 and $14 in March and April.
Earlier this month, however, the bulls took over.
On May 2, the price broke back through $14, to $14.73. Then, less than a week later, it passed the the $15 mark, at $15.21, on May 7.
Among contracts for June delivery of refined products, unleaded gasoline closed at 54.38 cents a gallon, up from Thursday's 53.35 cents; leaded gasoline was up more than a penny to 54.41 cents, up from 52.95 cents Thursday, and heating oil also rose, to 44.54 cents, from 43.62 cents a day earlier.