Oil prices strike nine-month peaks
Posted: 19 June 2007 0402 hrs
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Oil rig in the North Sea
NEW YORK : World oil prices climbed on Monday to their highest peaks since early September, mostly on concerns about about tight gasoline supplies in the United States and unrest in Nigeria, analysts said.
New York's main oil futures contract, light sweet crude for delivery in July, jumped 1.09 dollars to close at 69.09 dollars per barrel.
In London, Brent North Sea crude for August delivery rose 71 cents to settle at 72.18 dollars per barrel.
Oil futures leapt for the fourth straight trading session, driven partly by traders' concerns about low US gasoline reserves during the ongoing driving season, when demand spikes as many Americans take to the roads for their summer vacations.
Last week oil prices gained five percent in New York and four percent in London after the US Department of Energy revealed Wednesday that US gasoline inventories were unchanged at 201.5 million barrels in the week ended June 8.
The report surprised market consensus expectations of a build in gasoline stocks, which are below the level a year ago, after five consecutive weekly increases.
"Gasoline is going to be tight this summer," Calyon analyst Mike Wittner said.
Although the New York benchmark opened slightly lower Monday on profit taking, the barrel price surged as high as 69.15 dollars about a half hour before the market closed, trading at levels last seen in early September 2006.
International political tensions also were propping up prices.
"There are plenty of bullish themes to support prices at the moment, with supply disruptions in Nigeria, concerns about Iran's refusal to halt nuclear enrichment, the Atlantic hurricane season and now concerns about fighting in Israel," noted Sucden analyst Michael Davies in London.
Nigerian unions on Monday delayed the start of a general strike by two days but warned that when it did begin on Wednesday it could hit oil exports from Africa's biggest producer.
Unions had given the government until midnight Sunday to reverse a doubling of value-added tax and a 15 percent hike in fuel prices, and review a decision to sell two state-owned oil refineries.
They also called for the implementation of a recent 15 percent wage increase.
"If a nationwide strike in Nigeria, scheduled to begin on Wednesday, is not resolved quickly, and, if this latest Nigerian violence also shuts in more production, the crude oil market should have limited downside potential," said Mike Fitzpatrick at Man Financial.
Nigeria is Africa's biggest oil producer and the world's sixth largest exporter, accounting for 2.6 million barrels a day, but a quarter of this has been lost to unrest and a spate of kidnappings of foreigners in the volatile oil-producing south.
US oil giant Chevron said Monday that about 20 armed youths had occupied an oil pumping facility in southern Nigeria over the weekend, but the military stormed the facility and forced the youths to flee.
The official said that the seizure was costing it 42,000 barrels of oil per day and that the facility had not yet resumed operations.
"The situation in Nigeria is having its impact," said one trader, who wished to remain anonymous. - AFP/de
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