21 May 2007 - 13:29
  • News Code: 105186

LONDON - Oil edged higher on fresh troubles in Nigeria and tight US gasoline supplies just ahead of the peak-demand summer driving season.

At 9.45 am, London Brent crude for July delivery was up 28 cents at 69.70 usd per barrel.

 

Meanwhile, New York crude for June delivery was up 16 cents at 65.10 usd a barrel.

 

"The market is still very sensitive to (US) gasoline supplies," said Tobin Gorey, Commonwealth Bank of Australia commodities strategist.

 

"The market is waiting for some direction... and (it) is rather quiet," he added.

 

Dealers said concerns remain whether US refineries could meet stronger gasoline demand which will peak during the summer when Americans take to the highways during the holiday driving season. The season begins on the May 26-28 weekend.

 

US government data, released last week, showed gasoline inventories are more than 7 pct below their five-year average for mid-May.

 

The market was also tracking fresh troubles in Nigeria, where recent rebel attacks on oil facilities have slashed output by more than 25 pct.

 

This month alone more than 30 foreigners have been abducted in the oil-rich Niger delta region while more than 150 foreign workers have been kidnapped since the start of last year.

 

On Sunday, Nigerian oil unions threatened to launch a strike beginning Thursday to protest the planned sale of two government-owned oil refineries in the city of Port Harcourt to private investors.

 

"What could stir things a bit are worries over the strike on May 24 that would affect the global crude market," Gorey said.

 

Elsewhere, the UN nuclear watchdog, the International Atomic Energy Agency (IAEA), is to issue a report on May 23 on Iran"s nuclear work which could lead to further sanctions from the Security Council against OPEC"s second-largest exporter of oil.

 

Mike Wittner, a Calyon oil analyst said: "The IAEA"s report is likely to set in motion another round of security talks. The sanctions enacted so far have been limited in scope and we expect that to continue, but they are likely to be supportive of prices."

 

PIN/HEMSCOTT.COM

News Code 105186

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