U.S. crude oil prices soared above $65 a barrel Monday on fears that escalating violence in Nigeria could result in supply disruptions, while gasoline prices climbed toward a seasonal peak.
Early estimates for draws on the country's crude oil and gasoline stocks pushed prices higher, analysts said.
Last week, U.S. gasoline inventories stood at the lowest level since October 2005 and were about 3% below the level at this time last year, said Citigroup Global Markets energy analyst Tim Evans. The price of gasoline on the futures market and at the pump historically peaks ahead of the summer driving season -- when concerns about supplies reach a crescendo.
'I think we're close to a seasonal top to gasoline prices,' Evans said. 'That typically occurs when anxiety about summer supplies is at its peak. We may not be the most anxious today, but we're not far from it.'
Light, sweet crude for June delivery climbed $1.78 to settle at $65.89 a barrel on the New York Mercantile Exchange. The contract rose just shy of $66 earlier in the session, trading as high as $65.96. Crude last topped $66 a barrel on March 29.
May gasoline futures gained 5.33 cents to settle at $2.1907 a gallon
. Last year, gasoline futures peaked at $2.505 a gallon on May 11, according to Evans.
At gasoline stations nationwide, a gallon of unleaded averaged about $2.85 according to AAA -- up from about $2.58 a month ago but below the year-ago level of $2.90.
On Monday, following government elections over the weekend in Nigeria, gunmen battled security forces in Nigeria's southern oil region, leaving at least seven people dead in the area's main city, police said. Traders pushed oil prices higher on fears that political unrest and violence in that country -- a main oil supplier to the United States -- would lead to further supply disruptions.
Nigerian officials said the governing party candidate won presidential elections, but a top opposition politician rejected the vote, alleging fraud. Observers of the U.S.-based International Republican Institute pointed out irregularities in the voting.
The week leading up to the elections in Nigeria was chaotic and bloody. At least 49 people have died in election-related violence since April 14. Rising violence since early 2006 in the unruly southern region where crude is pumped has cut Nigeria's daily production by about one quarter and sent global crude prices higher. More than 150 foreigners have been kidnapped over the past year. 'Today's exacerbated move upward may prove to be transitory if the Nigerian election doesn't translate into a real supply disruption,' said Wachovia economist Jason Schenker.
Brent crude for June delivery jumped $1.66 to settle at $68.15 a barrel on the ICE Futures exchange in London.
Oil prices were also supported by strong demand from China, the world's second-largest oil consumer, which reported Monday that March crude oil imports rose 8.8 percent year on year. Analysts expect demand to remain strong if Beijing is unable to cool off the country's sizzling economy, which grew 11.1% in the first quarter.
Meanwhile, in Belgium, workers at four refineries that push through 800,000 to 1 million barrels of oil a day are threatening to strike as early as May 9 after wage talks broke down last week.
'With U.S. gasoline inventory days of supply at the lowest levels in two decades, any further shutdowns in refinery capacity could have a serious effect on U.S. gasoline prices,' said Raymond James analyst J. Marshall Adkins, in a report.
Heating oil futures rose 6.18 cents or 3.4% to settle at $1.8943 a gallon. Natural gas prices settled up 18.1 cents at $7.562 per 1,000 cubic feet.