admin
05-15-2007, 09:56 PM
Oil prices rise on Nigeria supply cut
Oil rose above $67 a barrel yesterday, reversing an earlier loss after a deeper supply disruption in Nigeria, the world’s eighth-largest oil exporter.
Prices reversed course on news reports that villagers in Nigeria occupied a major oil pipeline hub, forcing Royal Dutch Shell to cut 170,000 barrels per day.
“The market is underpinned by gasoline tightness and ongoing geopolitical troubles,” said independent oil analyst Geoff Pyne. “It’s difficult to see much downside for the market really.”
London Brent crude for June, which expires today, rose 50 cents to $67.33 a barrel by 1530 GMT. US crude added 45 cents to $62.91.
Attacks in Nigeria have now shut off nearly 900,000 bpd or about 30 percent of the country’s supply capacity.
Earlier in the session, prices fell on expectations for a build in U.S. fuel inventories. Falling gasoline stocks have been supporting prices in recent weeks.
As refiners begin to bring plants back from maintenance, analysts polled by Reuters forecast US weekly data would yesterday show gasoline inventories rose by one million barrels.
Crude inventories were expected to rise by 200,000 barrels, while distillate fuel stocks were seen up 1.3 million barrels.
“We are at a stage where they’ve got to build up the inventories for the peaking demand that’s coming in the middle of June,” said Tobin Gorey, a commodity analyst with the Commonwealth Bank of Australia in Sydney.
US average gasoline pump prices have hit a record $3.10 a gallon.
The Organisation of the Petroleum Exporting Countries yesterday said its current output of around 30 million bpd was more than enough to cover demand during the peak summer driving season.
Opec’s head of research Hasan Qabazard went further to say the group might not have to change oil output when it holds its next scheduled meeting in September.
Meanwhile, the head of International Energy Agency (IEA) said yesterday the agency planne to ask Opec this week to increase output by the middle of the year to avoid a cut in oil stocks which could push up prices.
“The IEA is holding a bilateral meeting with Opec,” the consumer watchdog’s President Claude Mandil told a news conference in Paris. He said the meeting would take place in Indonesia.
“Like we said in our last monthly report we do not see how our market can be balanced without an increase of Opec production,” he said.
Oil rose above $67 a barrel yesterday, reversing an earlier loss after a deeper supply disruption in Nigeria, the world’s eighth-largest oil exporter.
Prices reversed course on news reports that villagers in Nigeria occupied a major oil pipeline hub, forcing Royal Dutch Shell to cut 170,000 barrels per day.
“The market is underpinned by gasoline tightness and ongoing geopolitical troubles,” said independent oil analyst Geoff Pyne. “It’s difficult to see much downside for the market really.”
London Brent crude for June, which expires today, rose 50 cents to $67.33 a barrel by 1530 GMT. US crude added 45 cents to $62.91.
Attacks in Nigeria have now shut off nearly 900,000 bpd or about 30 percent of the country’s supply capacity.
Earlier in the session, prices fell on expectations for a build in U.S. fuel inventories. Falling gasoline stocks have been supporting prices in recent weeks.
As refiners begin to bring plants back from maintenance, analysts polled by Reuters forecast US weekly data would yesterday show gasoline inventories rose by one million barrels.
Crude inventories were expected to rise by 200,000 barrels, while distillate fuel stocks were seen up 1.3 million barrels.
“We are at a stage where they’ve got to build up the inventories for the peaking demand that’s coming in the middle of June,” said Tobin Gorey, a commodity analyst with the Commonwealth Bank of Australia in Sydney.
US average gasoline pump prices have hit a record $3.10 a gallon.
The Organisation of the Petroleum Exporting Countries yesterday said its current output of around 30 million bpd was more than enough to cover demand during the peak summer driving season.
Opec’s head of research Hasan Qabazard went further to say the group might not have to change oil output when it holds its next scheduled meeting in September.
Meanwhile, the head of International Energy Agency (IEA) said yesterday the agency planne to ask Opec this week to increase output by the middle of the year to avoid a cut in oil stocks which could push up prices.
“The IEA is holding a bilateral meeting with Opec,” the consumer watchdog’s President Claude Mandil told a news conference in Paris. He said the meeting would take place in Indonesia.
“Like we said in our last monthly report we do not see how our market can be balanced without an increase of Opec production,” he said.