Oil prices climb on supplies, violence

Oil prices climbed Sept. 6 on reports of shrinking U.S. supplies of crude and gasoline, and as news of violence in the Middle East and rising tensions in Nigeria unnerved investors.

The U.S. embassy in Nigeria warned about the risk of terrorism in the West African nation, a major supplier of oil to the U.S. and Syrian air defenses opened fire on Israeli aircraft that allegedly violated Syrian airspace, heightening tensions in the region.

Oil prices climbed following a government report showing larger-than-expected declines of both crude and gasoline. The Energy Information Administration said crude inventories dropped by a larger-than-expected 3.9 million barrels in the week ended Aug. 31, and gasoline stockpiles fell by 1.5 million barrels. Analysts polled by Dow Jones Newswires projected 1.1 million barrel draws on stockpiles of both.

October crude futures jumped 70 cents to $76.43 on the New York Mercantile Exchange, after earlier topping $77 a barrel. The front-month gasoline contract slipped 1.1 cents to $1.9855 a gallon.

“I think the market is a bit jittery now,” said Antoine Halff of Fimat energy research. “There’s been a sensitivity to bullish headlines.”

Those headline events include the U.S. Embassy’s statement about the risk of terrorism in the region and the skirmish between Syria and Israel. Also bullish for the market have been comments by OPEC ministers suggesting the cartel doesn’t see the need for an increase in production volumes, Halff said. The Organization of Petroleum Exporting Countries is scheduled to meet on Sept. 11. At the same time, investors have been reluctant to push prices lower at the heart of the hurricane season.

—The Associated Press