Brace yourselves for more pain at the pump

NEW YORK (MarketWatch) -- Crude-oil futures rallied Monday, boosted by a combination of factors, including an increase in fuel demand, escalating tensions between Russia and the West, and the risk of a cyclone hitting the Persian Gulf.
Crude for July delivery closed up $1.13 at $66.21 a barrel on the New York Mercantile Exchange.
"We had a report from the Energy Department measuring total implied fuel demand in the U.S. at an average 20.9 million barrels in the four weeks that ended May 25," said Sean Brodrick, a contributing editor at MoneyandMarkets.com.
"That's up 2.4% from the same period a year earlier, and with refinery capacity so tight, there is no room for error," he said. "Higher fuel demand is pulling everything higher."
Prices were also strengthened by expectations that Cyclone Gonu will hit the Persian Gulf in the next 24 hours. The U.S. Navy has warned coalition military ships in the Gulf to avoid the cyclone, Zawya Dow Jones reported Monday.
"By June 1, we experienced our second name storm of the 2007 hurricane season," Brodrick said. "That is a strong argument for a very busy season indeed, maybe for reasons that aren't factored in the models yet."
"I think traders are starting to price in the potential for a real blow-down season," he said.
Tom Kloza, chief oil analyst at the Oil Price Information Service, said: "There will be talk about the cyclone headed for Oman, as well as the various global tensions that one can grab on any day."