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THE WALL STREET JOURNAL: Oil Jumps Above $66 a Barrel As Supply Jitters Spark Rally

March 29, 2006; Page C4
Crude futures smashed out of their recent trading range, rallying nearly $2 and closing above $66 a barrel for the first time since early February as supply worries heightened.
The May crude delivery contract on the New York Mercantile Exchange rose $1.91 a barrel, or 3%, to $66.07, the highest close since Feb. 1. Crude futures had spent much of the past two months in a range of $59 to $65.
The rally came amid a backdrop of growing worries about supplies in major oil-producing countries.
In Norway, the country's largest private-industry union, Fellesforbundet, threatened to strike Saturday if an agreement isn't reached by Friday with the Federation of Norwegian Industries over pensions and wages.
The strike wouldn't affect offshore oil and gas production. Nevertheless, traders and analysts said the threat led to a burst of buying by investors already jittery about the loss of more than a quarter of Nigeria's crude-oil production.
“Every time we got any news suggesting that there is a problem with supply, this market wants to rally,” said Peter Beutel, president of trading advisory firm Cameron Hanover in New Canaan, Conn.
Nigerian militants on Monday freed the last three of the oil workers they had been holding hostage, but said they would continue attacks on oil infrastructure. Royal Dutch Shell PLC, the largest foreign oil company operating in the country, has shut nearly half of its Nigerian production, and says it won't resume operations until the country is safe for its workers.
In other commodity markets:
SUGAR: Prices on the New York Board of Trade climbed nearly one cent per pound and touched one-month highs as the market followed gains in crude oil and purchases by speculative funds. The May contract ended up 0.69 cent at 18.17 cents a pound.
COPPER: Prices on the Comex division of the Nymex pulled back slightly from Monday's levels. However, analysts and traders say the upward trend in copper is still intact, and prices could touch $2.50 a pound soon. The March contract ended up 1.9 cents to $2.4940 a pound, while the most-active May future closed down 0.15 cent to $2.4250.
Write to Masood Farivar at [email protected]

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