U.S. crude oil futures ended lower for the fourth consecutive session on Thursday, as Nigerian militants freed several hostages taken from an Italian-operated oil field.
Prices were up early after militants took 18 foreign workers in three attacks in Nigeria's oil-producing Niger Delta region, which raised more worries over already thin output from the OPEC member.
News that Shell was preparing to restart operations in June at its 380,000 barrel-per-day (bpd) Forcados oil fields in Nigeria, which had been shut for more than a year due to security concerns, was also bearish, traders said.
The day's crop of refinery news showed planned maintenance and some minor problems, pulling up gasoline futures to positive territory. The continued pile-up of similar events over the last few weeks has been supportive for gasoline.
Gasoline's rebound overshadowed earlier impact of news that a strike in Belgium's oil sector had been temporarily averted as unions and employers agreed to a provisional pay deal, which traders said eased concern over possible tightening of gasoline exports to the United States from Europe.
On the New York Mercantile Exchange, June crude settled at $63.19, down 49 cents or 0.8%, after trading from $62.74 to $64.09 . In four days, prices have fallen $3.27 or 4.9%.
"Obviously, products are still providing strength, with the RBOB holding up, and the crude is being pressured by the DOE not buying SPR oil," said Phil Flynn, analyst at Alaron Trading in Chicago.
The U.S. Energy Department on Wednesday rejected a second round of bids to buy up to 4 million barrels of crude oil for the Strategic Petroleum Reserve and said it won't buy oil until at least the end of the summer driving season.
The move leaves about 133,000 barrels a day in the market that would have been removed as refineries ramp up production to make gasoline for the peak summer driving demand.
In London, June Brent crude was last at , after trading $65.57 to $66.98.
NYMEX June RBOB gasoline ended up 1.50 cents or 0.7%, at $2.2476 a gallon, trading $2.1969 to $2.2568.
NYMEX June heating oil finished down 0.73 cent or 0.4%, at $1.8453 a gallon, trading $1.83 to $1.8631.
The Nigerian government said Thursday eight oil workers kidnapped from an offshore oil field by militants had been released hours after being abducted.
Earlier, the Nigerian militant group MEND said all the hostages taken from an Italian-operated offshore oil field earlier on Thursday had been released.
The Movement for the Emancipation of the Niger Delta said the group had not intended to take more hostages, having seized six foreign workers from a U.S.-operated oil field on Tuesday.
U.S. gasoline stocks fell 1.1 million barrels to 193.1 million barrels in the week to April 27, putting supply at the lowest level since October 2005. It was the 12th straight week of drawdowns, slashing supply 34.1 million barrels, or 15%, since the week to Feb. 2.
Refinery capacity use up 0.5 percentage point, to 88.3% of capacity, against 88.8% from the same week a year ago. Refinery snags and seasonal maintenance have kept refinery use curbed and helped support RBOB futures.
Crude stocks rose 1.1 million barrels to 335.6 million barrels, up for the second week in a row. Both gasoline and crude data were near market expectations.
In U.S. refinery news, independent oil refiner Sunoco plans to carry out a 28-day turnaround at its 85,000 barrels a day Tulsa, Oklahoma, refinery in June, the company said in its earnings release.
The shutdown comes amid extensive downtime around the Cushing, Oklahoma, oil trading hub, which is the delivery point for NYMEX WTI futures. The shutdowns have led to unusually large stocks being built up at Cushing which has depressed WTI prices.
Shell said Thursday that the flaring reported at its Deer Park, Texas, complex was related to the chemical plant and that refinery operations were normal.
U.S. oil prices sank to their lowest level in about six weeks after Nigerian militants freed several foreign workers seized from an offshore oilfield.
Natural gas inventories in the U.S. rose 87 billion cubic feet, according to the Department of Energy's weekly report. Analysts were expecting an 81 bcf increase.
U.S. crude dropped as low as $62.74 before rebounding to settle down 49 cents or 0.8% at $63.19 . London Brent crude, currently seen as the most representative of global oil prices, also fell , after dropping 75 cents on Wednesday.
Prices had risen earlier in the session after unidentified gunmen took 18 foreign workers in three attacks in Nigeria's oil-producing Niger Delta region.
The Movement for the Emancipation of the Niger Delta (MEND) said it has since freed eight of the workers.
Violence in the world's eighth-largest oil exporter has caused prices to soar in the past, but analysts believe the region's volatility has already been priced into the market.
"This news has not registered as it might have at some other time, showing participants' willingness to shed length at these price levels," said John Kilduff of Man Financial.
MEND said the recent kidnappings should serve as a warning to foreign companies not to return to oilfields previously attacked by the group.
Royal Dutch Shell said it was preparing to restart operations at its 380,000 bpd Forcados oilfields, shut for more than year due to security concerns. But the company declined to provide a specific date and many analysts have raised doubts about its resumption.
"We remain skeptical that a sustainable increase in Nigerian production can actually be achieved," said Kevin Norrish of Barclays Capital.
Militant attacks, which have increased sharply in the past year, have shut output of about 600,000 barrels a day, or a fifth of production capacity.
Gasoline futures in New York pulled back after gains in recent weeks that have supported crude oil prices, as a likely recovery in refinery operations in coming weeks could reverse the declines caused by plant shutdowns.
In Asia, Exxon Mobil said it had shut a 115,000 barrels per day (bpd) crude unit at its giant Singapore refinery indefinitely as a result of a fire in a related unit, threatening to tighten Pacific Basin gasoline supplies.