Energy Sector Roundup: Oil hits new high above $126

Oil tops $126 a barrel for first time

Oil prices surged past $126 a barrel for the first time, capping a week of record highs, amid concerns that a possible confrontation between the U.S. and Venezuela could cut exports from the key South American oil producer.

Light, sweet crude for June delivery vaulted to a new record of $126.20 on the New York Mercantile Exchange before retreating to settle up $2.27 at a record $125.96. Prices finished the week nearly $10 higher than where they began.

Prices at the pump also set new highs. The national average price of a gallon of regular gas jumped 2.6 cents overnight to a record $3.671 a gallon, according to a survey of stations by AAA and the Oil Price Information Service. Diesel prices also rose.

In other Nymex trading Friday, June gasoline futures rose 6.34 cents to settle at a record $3.2012 a gallon after rising to their own record of $3.2038. Heating oil for June delivery rose 12.62 cents to settle at $3.636 on the Nymex after earlier setting a trading record of $3.6524. Natural gas futures rose 27.4 cents to settle at $11.537 per 1,000 cubic feet after earlier hitting a record $11.569.

Oil executives see crude prices falling by year's end

Despite oil's recent string of record highs, a new survey suggests many oil and gas industry executives expect crude prices to fall significantly by the end of the year.

In a KPMG LLP survey of 372 petroleum industry executives, 55 percent said they believe oil prices will drop below $100 a barrel by the end of the year. Twenty-one percent of respondents predicted a barrel of oil will end the year between $101 and $110, while 15 percent forecast the year-end price to be between $111 and $120 a barrel.

Only 9 percent said they expect prices to stay above $120 a barrel through the end of the year.

Of the executives surveyed, 44 percent said their companies plans to boost capital spending on exploration and production by 10 percent during the next year.

The survey, which was conducted last month and released Friday, included executives for major oil companies, independent exploration and production outfits and other energy companies.

Brazil eyes OPEC membership

Brazil wants to join the Organization of Petroleum Exporting Countries to help lower global oil prices, the country's president was quoted as saying in a leading German magazine.

Brazilian President Luiz Inacio Lula da Silva said in the interview with Der Spiegel that his country plans to exploit its massive offshore oil reserves to make itself "a major oil exporter," according to an advance copy of the interview to be published Saturday.

"We want to join OPEC and to try to make oil cheaper," he said.

The U.S. Energy Department estimates Brazil's proved reserves total 11.8 billion barrels.

Canada to seek new markets if U.S. blocks oil sands fuel

The head of Canada's oil-rich Alberta said the province will simply sell its huge reserves to other countries if the U.S. goes ahead with plans to impose import restrictions on fuels made from Canada's oil sands.

The U.S. is preparing to block the military and other federal agencies from buying fuel made from oil sands crude and other sources that produce higher greenhouse gas emissions than conventional fuels. Alberta has been trying to get oil sands fuels exempted from the U.S. legislation.

"I'm not warning them, I'm just being frank," Alberta Premier Ed Stelmach said. "I'm just saying that we have options and will continue to pursue options."

Stelmach said he has told U.S. officials that Alberta will no longer allow itself to depend primarily on the American market for exports.

Industry officials estimate Canada's oil sands, a tar-like bitumen that is extracted using mining techniques, could yield up to 175 billion barrels of oil.

Venezuela says oil reserves grew 30 percent

Venezuela's proven crude oil reserves have increased by 30 percent, the country's oil minister told a meeting of South American energy ministers.

Oil Minister Rafael Ramirez said Venezuela now has 130 billion barrels of proven oil reserves. After Canada's massive reserves of harder-to-process oil sands, that is the biggest reserve outside the Middle East.

Ramirez said Venezuela added 30 billion barrels to its total last month, and plans to quantify additional heavy crude deposits in the country's Orinoco River basin.

--Compiled by AP Business Writer Adam Schreck