Violence in Nigeria stokes oil prices
OIL prices rose yesterday after the armed seizure of four American workers and bombing of oil pipelines by militants in Nigeria raised more concern about escalating violence in the petroleum-producing region.
An upcoming U.S. inventories report, meanwhile, was expected to show a rebound in gasoline stocks for the first time in three months.
Light, sweet crude for June delivery rose 12 cents to $62.38 a barrel in electronic trading on the New York Mercantile Exchange by afternoon in Europe. June Brent crude was up 45 cents at $65.99 a barrel on London's ICE Futures exchange.
Prices had gone up on Tuesday after the U.S. government said the price of gasoline was expected to rise this summer due to ongoing problems at the nation's refineries.
Increased violence in Nigeria's oil region also heightened supply worries in the energy market and lifted prices.
The attackers, carrying assault rifles and rocket-propelled grenades stormed a vessel carrying the workers in the southern Niger Delta minutes before midnight on Tuesday, two industry officials told The Associated Press.
The latest kidnappings, following dozens last week came just hours after militants staged co-ordinated attacks on three pipelines in the wetlands region, knocking out tens of thousands of barrels of crude oil and keeping global supply fears alive.
Nigeria is Africa's largest producer of crude, one of the top 10 exporters in the world and a leading supplier of oil for the United States.
Some were hopeful that the violence would not persist.
"I believe the rising spate of attacks is a short-term pre-inauguration thing," said Eurasia Group analyst Sebastian Spio-Garbrah, "but after May 29 all the positive political catalysts for Niger Delta stability are there."
Traders were also awaiting the weekly U.S. Energy Department report on gasoline inventories, due later yesterday. Analysts surveyed by Dow Jones Newswires expected the report to show gasoline stocks rose 370,000 barrels last week, on average. It would be the first increase in gasoline stocks in 13 consecutive weeks.
Unplanned outages and scheduled maintenance at refineries, sluggish imports and strong demand have plagued gasoline supplies. There have been at least a dozen additional partial shutdowns in the U.S. and internationally that cut refining capacity.
Heating oil futures on the Nymex were up 1.3 cents at $1.8429 a gallon, and natural gas prices slipped 2.5 cents to $7.612 per 1,000 cubic feet.
