Oil prices surpassed $76 a barrel Monday to reach their highest level in nearly a year after a global energy watchdog warned of a looming oil and natural gas supply shortage.
August Brent crude rose 65 cents to $76.27 a barrel on the ICE Futures exchange in London, its highest point since August 2006.
The Paris-based International Energy Agency, an adviser to 26 industrialized countries, reported that higher-than-expected demand would persist to 2012 amid tightening supplies.
Escalating global growth will draw on spare capacity from the Organization of Petroleum Exporting Countries, and non-OPEC countries will fail to pick up the slack, the IEA said in its oil market report.
OPEC ministers, however, dispute that supply shortages are driving up prices, blaming refinery problems and geopolitical unrest.
"The big question is did OPEC read this report?" said Phil Flynn, analyst at Alaron Trading Corp. in Chicago.
"OPEC sees the world with $72-a-barrel glasses."
Light, sweet crude for August delivery fell 20 cents to $72.61 a barrel in electronic trading on the New York Mercantile Exchange. The price dipped as low as $72.01 earlier Monday.
On Friday, the contract gained $1 to settle at $72.81 a barrel -- the front-month contract's highest settlement since Aug. 15, 2006.
"I think people only need to sit down with a pencil and paper to realize oil prices will be very tight unless something changes," Flynn said.
Gasoline for August rose 2.5 cents to $2.3348 Monday on the Nymex.
News of more kidnappings in southern Nigeria contributed to choppy trading earlier in the day.
Prices dropped in early trading following the release on Sunday of a 3-year-old daughter of a British oil worker, but rebounded on news that gunmen attacked an oil facility in restive southern Nigeria overnight and took two Royal Dutch Shell employees hostage.
Markets have also focused on a surprisingly small increase in refinery utilization in Thursday's inventory report from the U.S. Energy Department's Energy Information Administration. While utilization rose to 90 percent, it was below the 94 percent to 95 percent most think is necessary to meet peak summer driving demand.
Analysts have worried for months that the refining industry isn't producing enough gas to meet demand. Those concerns have been exacerbated by an unusually high number of refinery outages this year.
In other trading on the Nymex, heating oil futures rose 0.51 cent to $2.1002 a gallon, while natural gas prices rose 11.1 cents to $6.555 per 1,000 cubic feet.
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