22 May 2007 - 12:04
  • News Code: 105277

VIENNA - Oil prices climbed Monday on continued concerns that U.S. refiners are not producing enough gasoline to meet peak summer demand.

The upward trend was held in check, however, with news from Nigeria that a key pipeline hub that had been taken over by protesters for nearly a week had started pumping again.

 

Light, sweet crude for June delivery gained 1.33 cents to $66.27 US barrel in electronic trading on the New York Mercantile Exchange by noon in Europe.

 

With the summer driving season set to begin in just over a week, energy traders have been concerned that gasoline supplies won"t meet demand. A string of planned and unexpected refinery shutdowns have fuelled such worries.

 

"It will continue to be an issue. If demand is strong this season, it"s going to be hard to keep up and it will push prices," said Tobin Gorey, a commodity strategist with Commonwealth Bank of Australia in Sydney.

 

The U.S. Energy Information Administration reported last Wednesday that gasoline stocks -- while increasing to 195.2 million barrels for the week ended May 12 -- remained well below the average for this time of year.

 

Traders were also watching the political situation in Nigeria.

 

Nigerian labour leaders on Thursday called a two-day strike later in May to protest last month"s elections. The strike is scheduled for May 28 to coincide with the inauguration of a new government.

 

The unions say that the April elections, which gave a sweeping victory to President-elect Umaru Yar"Adua and the ruling People"s Democratic Party, were fraudulent.

 

Other Nigerian developments appeared to be putting a brake on any major upward price swings, however, with a pipeline hub in the Niger Delta pumping again after being taken over by protesters for six days.

 

"The restart of the terminal is likely to be welcomed as good news by refiners in (the) U.S. who will need plenty of Nigeria"s light-sweet crude to meet gasoline needs during the high demand summer months," said Vienna"s PVM Oil Associates.

 

PIN/Canada.Com

News Code 105277

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