Oil Settles Just Above $65 After Earlier Rise on Refinery Issues
U.S. crude oil futures ended a choppy session lower as traders booked profits. Earlier in the day, prices jumped above $66 a barrel amid a flurry of refinery glitches. A string of refinery outages in the United States, coming on the heels of a long and extensive maintenance season, has drained gasoline stocks as the giant market gears up for driving season.
On the New York Mercantile Exchange, June oil settled down 78 cents or 1.2% at $65.06 after falling as low as $64.82 .
News this afternoon of a fire at Marathon's Garyville, Louisiana, refinery pushed crude higher after talk of problems with an Exxon Mobil plant in Texas earlier.
"It's all refinery related," said Mark Waggoner, president of Excel Futures. "We're facing a high demand season and all you hear are refinery troubles."
Unplanned outages and refinery maintenance helped drain U.S. gasoline stocks again last week, leaving inventories 15% below early February levels, according to U.S. government data released on Wednesday.
Front-month RBOB gasoline set a fresh 8-month high at $2.3200 before giving back most of its gains. It settled up .77 cents or 0.3% to $2.2903.
"The culprit as ever is an overly stressed refining system lacking flexibility and finding as a result that units now have a greater than normal tendency to fall over," said Kevin Norrish of Barclays Capital.
Earlier today, news that differences between Tehran and the European Union on Iran's nuclear plans were narrowing helped weaken prices.
After talks on Wednesday between the European Union and Iran, the OPEC nation's chief nuclear negotiator Ali Larijani said the two sides -- due to meet again in two weeks -- were
approaching "a united view" in some areas.
The dispute over Iran's nuclear program, which Tehran insists is only for energy, has dragged on for nearly a year, keeping oil prices supported as investors anticipate possible supply disruptions.
World powers are reluctant to see Iran develop an energy form that can enable production of an atom bomb.
Prices have also drawn support from a flare-up in violence in OPEC-producer Nigeria following weekend elections that observers say were rigged.
Nigeria has lost 600,000 barrels per day of output for over a year, though Nigerian officials say more than half that volume will be restarted by the end of May.