16 May 2007 - 11:52
  • News ID: 104807

Oil prices dipped Tuesday amid refinery woes and uncertainties over whether U.S. gasoline inventories can meet summer driving demand.

Markets were awaiting weekly U.S. supply data which is expected to show that gasoline inventories rose, as did distillate stocks.

 

Light, sweet crude for June slid 9 cents to $62.37 on the New York Mercantile Exchange (Nymex) by midday in Europe. The contract had gained 9 cents to settle at $62.46 a barrel Monday.

 

Brent crude contract for June delivery dropped 37 cents to $66.46 a barrel on the ICE Futures exchange in London.

 

With refinery outages reported at a large Preem facility in Sweden, and a quickly resolved problem at a Valero Energy Corp. refinery in Texas last week, analysts are concerned that gasoline supplies, though rising, won"t meet the peak demand of the U.S. summer driving season, which begins at the end of May.

 

Unplanned outages and scheduled maintenance at refineries, sluggish imports and strong demand have plagued gasoline stocks since early February. At least a dozen additional partial shutdowns have occurred in the U.S. and internationally that cut refining capacity.

 

Violence in Nigeria has also lifted oil prices. Six gunmen wearing military fatigues seized a Nigerian worker of the Italian oil company Agip on Monday.

 

Chevron Corp. temporarily shut down some operations in Nigeria"s offshore waters Friday as the second-largest U.S. oil company scrambled to protect its workers and equipment from violence.

 

Traders were also watching U.S. government data for the week ended May 11, which is expected to show U.S. gasoline inventories rise by an average of 900,000 barrels, according to a Dow Jones Newswires survey. Distillate stocks, which include heating oil and diesel fuel, were likely to grow by 1.2 million barrels on average.

 

"The expectation is that refinery utilization should increase, and that the majority of the increase would be weighted toward production of gasoline," said Brad Samples, an analyst at Summit Energy, noting that gasoline-producing units have been "down the most" amid a recent spate of refinery outages.

 

Heating oil futures fell 1.43 cents to $1.8525 a gallon on the Nymex while natural gas prices fell 2.6 cents to $7.926 per 1,000 cubic feet.

 

PIN/AP

News ID 104807

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