| Crude oil gains as yukos prompts supply concern Original Source Link: (May no longer be active) http://quote.bloomberg.com/apps/news?pid=10000086&sid=aoPmg317NVVw&refer=latin_americahttp://quote.bloomberg.com/apps/news?pid=10000086&sid=aoPmg317NVVw&refer=latin_america
Crude Oil Gains as Yukos Cash Shortfall Prompts Supply Concern July 23 (Bloomberg) -- Oil futures rose for a third day amid concern supplies could be hampered if Russia's government seizes the nation's No. 2 oil company.
OAO Yukos Oil Co. said it has enough cash to last three weeks. The government wants to seize and sell Yukos's main Siberian oil business, OAO Yuganskneftegaz, to pay a $3.4 billion tax bill, a move that Yukos said will bankrupt it. The Siberian business pumps about 1 million barrels a day, or 1.2 percent of world oil supply.
``The fact that Yukos is in trouble and could face a fire sale is enough to spook the market,'' said Chris Ovrebo, a broker with FC Stone LLC in Eden Prairie, Minnesota.
Crude oil for September delivery was up 32 cents, or 0.8 percent, at $41.68 a barrel at the 2:30 p.m. close of floor trading on the New York Mercantile Exchange. Oil futures have closed above $40 per barrel for the past eight days, matching a run starting May 11.
Brent crude oil for September settlement rose 25 cents, or 0.7 percent, to $38.26 a barrel on London's International Petroleum Exchange.
Natural-gas supplies increased by 72 billion cubic feet last week, less than was expected by all but one of the 23 analysts surveyed by Bloomberg. That prompted a surge in gas prices that could boost the cost of oil-derived factory fuels, which compete with gas in five to 10 percent of U.S. factories.
``The gas run yesterday really surprised the oil guys,'' said Martin King, an analyst with Calgary-based investment firm FirstEnergy Capital Corp.
Oil prices have climbed 6.7 percent in the past three weeks and yesterday closed less than $1 below the record closing high.
Tax Payment
Bailiffs have collected 9.9 billion rubles ($340 million) from Yukos, Russia's biggest oil exporter, toward payment of the company's tax bill, chief court bailiff Arkady Melnikov told Interfax. Melnikov said bailiffs' actions ``won't paralyze'' company activities and concern about its possible bankruptcy is ``absolutely groundless,'' Interfax reported.
``Yukos has been a bit of an overbought story,'' said FirstEnergy's King. ``The Russians aren't going to give away that oil revenue.''
Oil and gasoline futures also rallied as traders secured long positions, or bets prices will rise, before exchanges close for the weekend. Terrorists have attacked pipelines and oil facilities in the Middle East on weekends this year.
``Nobody wants to go home short,'' said Carl Larry, associate director of energy futures at Barclays Capital Inc. in New York.
Refinery Fire
A blaze at Germany's largest oil refinery has been extinguished and poses no threat to supplies, according to the company.
The fire at the Oberrhein GmbH & Co KG refinery in the Western German city of Karlsruhe broke out in a desulfurization unit when a chimney was brought down by an explosion, the company said in a statement faxed to news organizations.
`We don't expect any effects on the supply side, and the cause is not yet known,'' Mark Sellien, an emergency communications officer at the plant, said in a telephone interview. The fire broke out at 11:15 a.m. local time. No people were hurt, according to the company.
Prices for Brent crude gained as much as 1 percent after news of the fire. ``People are jittery and prices are jumping at any type of news,'' FirstEnergy's King said.
Atofina Petrochemicals Inc., a unit of French oil company Total SA, restored production after a lightning-strike related power loss Thursday afternoon at its Port Arthur, Texas, refinery, a company spokesman said.
``We were up to capacity within two hours'' yesterday, said Rick Hagar, an Atofina spokesman in Houston.
The refinery, the only one Atofina operates in the U.S., can process 240,000 barrels of crude oil and other petroleum components a day.
Atofina is the chemical unit of Total SA, Europe's third- largest oil company after BP Plc and Royal Dutch/Shell Group.
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