5 May 2007 - 09:06
  • News Code: 103821

LONDON -- World oil prices rose Friday on concerns about tight supplies amid a rash of kidnappings in major crude producer Nigeria and declining stockpiles of U.S. motor fuel, dealers said.

In London, the price of Brent North Sea crude for June delivery climbed 43 cents to 66.48 dollars per barrel in electronic trading.

 

New York"s main oil futures contract, light sweet crude for delivery in June, rose 11 cents to 63.30 dollars per barrel in electronic deals before the official open of the U.S. market.

 

"The market is currently well supported by declining U.S. gasoline (petrol) stocks and geopolitical tension," Sucden analyst Michael Davies said in London.

 

Investors are monitoring the latest developments in Nigeria, Africa"s biggest oil exporter, where armed men have this week abducted at least 20 foreigners in three separate incidents.

 

Nigeria is the world"s sixth-biggest oil exporter but its output is being severely hit by frequent kidnappings of foreign oil workers and attacks on pipelines.

 

Meanwhile dealers said that U.S. gasoline stockpiles remained in focus ahead of the U.S. holiday driving season, which starts later this month.

 

U.S. gasoline reserves fell 1.1 million barrels to 193.1 million last week and are down 34.1 million barrels or 15 percent since early February, according to data published this week by the U.S. Department of Energy (DOE).

 

Despite last week"s smaller-than-expected drop, it was the 12th weekly decline in a row for gasoline stocks.

 

"In the short-term, the U.S. gasoline market will continue to underpin (prices)," said Victor Shum, an analyst with energy consultancy Purvin and Gertz in Singapore.

 

The DOE added that American refineries ratcheted up their gasoline production last week, with capacity utilization increasing by a half point from the prior week to 88.3 percent.

 

"There is some market expectation that U.S. refinery operating rates will increase and the tightness in the gasoline market will be relieved," Shum said.

 

He added that a U.S. government announcement Wednesday that it would halt buying crude for its strategic petroleum reserve (SPR), possibly for several months, could put downward pressure on prices.

 

Despite concerns over stockpiles, oil producers cartel OPEC on Wednesday said that it saw no need to increase output, even as the International Energy Agency (IEA), the consumers watchdog, stressed the need to pump more crude.

 

PIN/AFP

News Code 103821

Your Comment

You are replying to: .
3 + 3 =