U.S. Oil Jumps Over $63 Ahead of Options Expiration, Nigeria Vote
U.S. crude oil futures ended sharply higher on Friday, pushed up at the expiration of the front-month May contract and ahead of Nigeria's presidential election Saturday that has oil markets worried about post-election turmoil disrupting supply.
Strong RBOB gasoline futures amid supply concerns and a refinery snag on the West Coast also supported the complex.
"Crude was strong with the May contract at expiration and on concern about Nigeria, and products, especially RBOB, continue to lead the charge," said Kyle Cooper, analyst at IAF Advisors in Houston.
On the New York Mercantile Exchange, May crude rose $1.55 or 2.5% to settle at $63.38. The contract traded from $61.77 to $63.60. Even though oil was up two of the last three days, NYMEX crude fell 0.4% this week -- its third consecutive weekly loss.
"Definitely, Nigeria concerns and the expiry of the May contract," said Tom Bentz, analyst at BNP Paribas Commodity Futures, citing reasons for the rise.
The contract dropped $1.30 on Thursday on pre-expiration selling and was also pressured by record storage of 28 million barrels at the Cushing, Oklahoma, NYMEX delivery point, partly due to refinery outages in the area and supply from Canada.
Cushing supplies rose but overall U.S. crude inventories fell for the first time in three weeks, slipping 1.0 million barrels last week.
In London, June Brent crude was up about 1%, trading from $65.48 to $66.61.
NYMEX May RBOB gasoline gained 4.86 cents 2.3% to settle at $2.1374. The contract traded in a range from $2.0815 to $2.1400.
May heating oil rose 2.67 cents or 1.5% to settle at $1.8325 after trading between $1.7955 and $1.8350.
Heavy gunfire and explosions broke out near the headquarters of the Bayelsa state government in Nigeria's oil-producing delta on Friday, witnesses said.
Nigeria's opposition charged on Friday that rigging had already begun on the eve of a presidential election, but the authorities denied reports of doctored ballots.
Saturday's presidential election comes as Nigeria hopes to bring back its shut Forcados field's output by the end of May, but oil markets remain on edge about possible production disruptions as the OPEC-member country struggles through its election.
Helping support RBOB futures, Los Angeles cash gasoline's premium to its NYMEX RBOB benchmark jumped 6 cents on Friday, as Shell Oil's San Francisco Bay-area refinery was said to have cut production due to a crude oil pipeline shutdown, according to traders.
Traders said Shell Oil's 156,000 barrel per day Martinez, California, refinery had cut output 10% due to the shutdown of a pipeline feeding crude oil.
ConocoPhillips reduced rates in multiple units at its Sweeny, Texas, refinery for unplanned repairs to a waste heat boiler, a company regulatory filing said.
Citgo restarted a 120,000-bpd crude distillation unit at its Lake Charles, Louisiana, refinery on Friday, four days later than planned, according to a source familiar with refinery operations.
RBOB gasoline futures have been supported by refinery work and slumping U.S. inventories. EIA data showed supply down 2.7 million barrels last week, extending declines to the 10th
That left gasoline stocks 30.2 million barrels leaner than in the week to Feb. 2. But refinery use jumped 2 percentage points to 90.4% of capacity.