Crude oil prices pass $21-per-barrel mark

Crude oil prices pass $21-per-barrel mark

SINGAPORE (Dow Jones): Asian oil refiners may have to reassess their operating rates in light of crude oil's push past US$21 a barrel Friday, Asian crude and oil products traders said.

At 0550 GMT, the September light, sweet crude contract traded on New York Mercantile Exchange Access at $21.05/bbl, up 8 cents from the Nymex close Thursday. The last time crude futures hit higher than $21/bbl was November 1997.

Crude futures have more than doubled since they hit a low of $10.35/bbl in December 1998.

In Asian trade Friday, September Dubai crude is trading about $18.87-$18.92/bbl FOB, up from $18.60/bbl FOB Thursday. September Tapis was trading at $20.90/bbl FOB-Malaysia early Friday, up from $20.50/bbl FOB-Malaysia Thursday.

"If current (crude) prices are sustained, some refiners' operations will be mothballed (shut)," said a crude trader based in Singapore.

Many refiners in Asia and Australia have had to cut their operating rates in recent months because of weak refining margins and market oversupply.

An oil products trader in Singapore said the picture looks bleak for refiners because crude prices are sustainable at their current levels in the short-term.

"Fund buying is pulling the whole complex up," he said. And prices may keep going higher, at least in the near term. "If crude hits $21.35/bbl, it may head up to as high as $23/bbl," the crude trader said.

"The only people to really get hurt by this (crude rally) are refiners because product prices don't move in line with crude prices," the products trader said.

"In the Far East, product prices have been sluggish anyway," he added. "Demand wasn't there $4 ago, and demand is still not there."