Also supporting the belief that demand will keep growing was the Energy Information Administration's short-term energy outlook released yesterday; the EIA predicted that oil demand will be 2.7 percent higher in the first quarter of 2007 than the same period a year ago, and that natural gas demand will surge 11 percent this year from 2006.

    The EIA also said that the Organization of Petroleum Exporting Countries slashed more of its crude output in February, and that the US retail gasoline price will average 2.62 U.S. dollars a gallon (69 cents a liter) in the second quarter. Yesterday, the average US pump price for regular gasoline was 2.49 U.S. dollars (65 cents a liter), up from 2.48 U.S. dollars a day earlier.

    On the Nymex, gasoline futures rose 0.86 cent to settle at 1.8533 U.S. dollars a gallon, heating oil futures rose 2.25 cents to settle at 1.7473 U.S. dollars a gallon, and natural gas prices rose 21.8 cents to settle at 7.472 U.S. dollars per 1,000 cubic feet.

    Tensions between Iran and the United States continued to lift oil prices. Washington is pushing for tougher UN sanctions on Tehran over its failure to comply with demands to halt its uranium enrichment program.

    Meanwhile, a major oil spill at a Nigerian Royal Dutch Shell PLC production facility, which the company said Monday reduced output at the facility by 187,000 barrels a day, also spurred energy traders to buy.

    The energy market's next move will depend largely on today's US weekly inventory report from the EIA. According to a survey of analysts by Dow Jones Newswires, analysts on average expect crude stocks are expected to rise by 2 million barrels; gasoline stocks to fall for the fourth week in a row by 1.4 million barrels; and distillate stocks to fall by 2.3 million barrels.

    (Source: Shanghai Daily)