Crude Oil Prices Surge

Crude oil futures hit $70 a barrel for the first time in seven-and-a-half months Monday, pushed higher by concerns over declining gasoline stocks in the U.S., supply disruptions in Nigeria and tension over Iran's nuclear program.

Light, sweet crude for May delivery briefly touched $70 a barrel before easing to $69.73 a barrel in European trading, up 28 cents from Thursday's close. The Nymex was closed for the Good Friday holiday.

The last time crude futures surpassed $70 a barrel was on Aug. 30 when they traded at a record $70.85 a barrel, after Hurricane Katrina struck the U.S. Gulf coast.

At London's ICE Futures exchange, Brent crude oil futures touched a new high above $71 a barrel, rising 54 cents to $71.11 a barrel for June delivery. The contract earlier spiked to $71.40 a barrel, the highest ever traded for a front-month contract. Brent crude's previous high was reached April 13 when it touched $70.99 in intraday trading.

"Gasoline inventories in the U.S. continue to be an issue in the market because last week's inventory report showed a stock decline as we approach the summer driving season," said Victor Shum, an energy analyst at Purvin & Gertz in Singapore.

According to a weekly report from the U.S. Department of Energy on Wednesday, gasoline inventories dropped 3.9 million barrels in the week ending April 7 to 207.9 million barrels, down nearly 2 percent from year-ago levels.

"But perhaps the concern over gasoline's stock drawdown is a little overdone as it's largely a result of the refinery maintenance season," Shum said. "When the refineries come back from maintenance, gasoline supplies may build, and then we could see the market go through a correction."

Heating oil prices rose to $1.9922 a gallon while gasoline futures jumped 1.21 cents to $2.1191 a gallon, a level not reached since early September.

The market was also driven by the disruption of Nigerian crude supplies by rebels and the possibility of Iranian oil exports being halted due to political tension.

In Nigeria, the world's 12th-largest oil producer, more than half a million barrels of crude a day are being blocked due to militant violence, and rebels have said they will target more supplies.

In Iran, the world's fourth-largest oil producer, no oil exports have been disrupted, but some market participants are worried they might be, depending on the U.N. Security Council's response to Iran's defiance of council resolutions concerning the country's nuclear program.

Meanwhile, natural gas traded at $7.151 per 1,000 cubic feet on Monday after the Department of Energy reported that natural gas inventories grew by 19 billion cubic feet in the week ending April 7 to 1.7 trillion cubic feet.