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Oil prices up following attack in Nigeria
Oil prices edged up May 1 after gunmen in oil-rich Nigeria kidnapped six foreign oil workers and killed a Nigerian sailor on a Chevron Corp. ship.
“This incident has once again highlighted the instability in the region, with the country’s output still below full capacity and the most recent presidential elections have only made the situation worse,” said Michael Davies, an analyst at Sucden in London.
A spokesman for California-based Chevron told Dow Jones Newswires that it had shut down 15,000 barrels a day of oil production because of the attack. The spokesman said four Italians, one American and one Croatian were abducted. Italy’s Foreign Ministry also said four Italian technicians were among the kidnapped.
In a separate incident, gunmen seized the mother of the newly elected governor of neighboring Rivers state, police said.
Light, sweet crude for June delivery on the New York Mercantile Exchange rose a penny to $65.72 a barrel in electronic trading by midday in Europe. On April 30, prices fell 75 cents a barrel.
Brent crude for June on London’s ICE Futures exchange rose 13 cents to $67.78 a barrel.
Heating oil futures rose 0.14 cent to $1.8962 a gallon on the Nymex, while natural gas fell 4.8 cents to $7.815 per 1,000 cubic feet.
U.S. refinery problems Analysts attributed some of the April 30 decline in oil prices to profit-taking from April 27’s big rally, when crude surged above $66 a barrel after Saudi Arabia announced the arrests of 172 Islamic militants, some of whom allegedly planned to attack oil fields.
Gasoline prices rose April 30 on reports of another series of U.S. refinery problems. Gasoline inventories have fallen for 11 weeks in a row. Last week’s U.S. Energy Department report showed an unexpected drop of 2.8 million barrels in U.S. gasoline stockpiles and said U.S. refinery use declined to 87.8 percent of capacity.
With the start of the summer driving season about a month away, some analysts wonder whether gasoline supplies will be adequate to meet demand.
“Although recent refinery runs have been on the low side, the real problem may not be a spike in unplanned plant outages, of which there is no compelling evidence, but rather the failure of U.S. refining capacity to keep up with consumption growth,” said Antoine Halff, an analyst at Fimat. “As a result, U.S. dependency on gasoline imports has shot up, at a time when the latter’s availability has itself come under pressure.”
—The Associated Press
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