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Oil prices hold firm as supply fears simmer
AFP
NEW YORK
Petroleumworld.com 05 15 07World oil prices held firm Monday, after breaching 67 dollars a barrel in London at one point in the trading session, as traders fretted over tight supply concerns.
New York's main oil futures contract, light sweet crude for delivery in June, closed up a slight nine cents at 62.46 dollars a barrel.
In London, the price of Brent North Sea crude for June delivery settled unchanged at 66.83 dollars a barrel. Earlier, strong gains had pushed the contract above 67 dollars.
Crude futures prices had surged on Friday after the International Energy Agency (IEA) warned of tighter supplies ahead.
New York oil prices gained support amid concerns about tight gasoline supplies ahead of the fast-approaching "driving season" when vacationing Americans take to the highways en route to summer vacation spots.
The American Automobile Association meanwhile said gasoline prices have leapt to record heights, smashing highs set in 2005 in the wake of Hurricane Katrina which ravaged the Gulf coast oil and gas industry.
The AAA said the average national price of unleaded regular gasoline jumped to 3.073 dollars per gallon (81.3 cents per liter) over the weekend, the highest average it has recorded.
Analysts say gasoline prices have spiked following seasonal refinery maintenance which has slowed fuel production in some areas of the United States, although refiners say they are now ratching their output back up.
"The major issue in the US market of course is historically low gasoline supplies," said Phil Flynn, an energy analyst at Alaron Trading.
"Whether it's the IEA warning OPEC to increase production to meet demand for gasoline this summer or its the admission that continuing unrest in Nigeria could slow US imports of crude and gasoline, the market is feeling the heat," Flynn said.
The Paris-based International Energy Agency last week warned that although global oil demand would dip slightly in 2007, oil and petrol markets could tighten, leading to price rises.
Victor Shum, of Purvin and Gertz in Singapore, said a number of factors were driving the global oil market.
"The gasoline price strains provide some support to the crude oil market although crude oil inventories in the US are at comfortable levels," Shum said.
Last week, US figures showed a surprisingly strong build-up in crude stocks of 5.6 million barrels and a gain of 400,000 barrels in gasoline -- the first such rise since early February.
Analysts said, however, that the weekly gasoline gain was likely just a blip as shutdowns and outages continued to restrict some refinery capacity.
Shum also pointed to unrest in Nigeria, Africa's biggest oil producer, as another factor supporting prices. Nigeria has lost about a quarter of its output owing to a series of attacks on facilities in the crude-rich Niger delta.
In the latest incident, unidentified gunmen Monday snatched a Nigerian working for Italian oil giant Agip in southern Nigeria's Rivers State where kidnappings have occurred regularly, a senior police officer said.
Shum said the situation in Nigeria "provides support to pricing even though US crude stocks are at a comfortable level."
US oil giant Chevron said Saturday it was suspending non-essential activities off Nigeria's oil-rich southern coast after four of its workers were seized from a construction vessel last Tuesday.
More than 150 foreign workers have been kidnapped there since the start of last year, most of them connected to the oil industry.
AFP 14 2017 GMT 05 07
Copyright© 2007 AFP. All Rights Reserved.
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