Oil Prices Top $19 a Barrel, Highest Level in 3 Months

Oil prices pushed past the $19-a-barrel mark on the New York Mercantile Exchange on Monday and closed at the highest level in more than three months in a largely technical rally.

Analysts said the May crude contract, which expired Monday on the Merc, drove up petroleum product prices and oil traded on the international stock market.

West Texas Intermediate--the benchmark U.S. crude for May delivery on the Merc--surged by 38 cents to $19.03 a barrel. It was the highest finish since the crude closed at $19.10 a barrel on Jan. 16.

The June crude contract rose 25 cents to $18.48 a barrel.

“The core fact is that the May contract helped pull up petroleum products, which are cheap relative to crude, and buoyed the rest of the market,” said Andrew LeBow, an analyst at Shearson Lehman Bros. in New York.

Analysts said some traders, who were caught short on the May crude contract, had waited until the last day to cover their commitments and unleashed the buying spree. Unleaded gasoline for immediate delivery climbed 0.52 cent to 51.10 cents a gallon, and home heating oil shot up by 0.88 cent to 47.71 cents a gallon.

On the U.S. Gulf Coast spot market, where oil is sold to the highest bidder, West Texas Intermediate jumped by 30 cents to $18.75 a barrel.

After the markets closed, the American Petroleum Institute reported that gasoline stocks rose last week as home heating oil and crude inventories fell.

The nation’s refiners trimmed operations, which can help reduce the U.S. oil surplus.

On the European spot market, Britain North Sea Brent crude gained 25 cents to $18.05 a barrel.

But the United Arab Emirates’ Dubai light--a key OPEC crude from the Middle East--slipped 20 cents to $16.75 a barrel.

Petroleum Intelligence Weekly, a New York-based oil journal, reported that Saudi Arabia now is producing close to its OPEC-assigned quota after stabilizing the world oil market last winter by curtailing its output.

Saudi Arabia, the Organization of Petroleum Exporting Countries’ principal producer, also is revising terms with the four U.S. partners of the Arabian American Oil Co. to assure stable purchases and moving to increase oil barter deals, Petroleum Intelligence said.

In December, OPEC adopted a Saudi proposal to cut production by 7.2% to 15.8 million barrels a day for the first half of 1987 in order to raise oil prices to an official average of $18 a barrel.

Petroleum Intelligence said the Saudis pumped between 3.8 million and 3.9 million barrels a day in the first half of April, compared to only 3 million barrels a day in March.

Under the OPEC accord, Saudi Arabia’s quota is 4.133 million barrels a day.