GO
Loading...

Oil Gains 1% on Africa Troubles and U.S. Gasoline Concerns

Oil climbed above $62 a barrel on Friday as supply disruptions in Africa compounded worries about inadequate gasoline stock levels in the United States, just weeks ahead of peak summer driving season.

The International Energy Agency (IEA) said supplies of motor fuel in the United States, which burns 40 percent of the world's gasoline, have sunk to a 16-year low for the time of year, pushing pump prices above $3 a gallon to near record levels.

U.S. light crude settled up 56 cents or 0.9% to $62.37 . So far this month, crude prices have fallen 5.1%.

London Brent rose , adding to a 59-cent gain the previous session.

Africa's oil woes flared after a fire on Thursday at Congo Republic's Nkossa oilfield killed two people and stopped output from the field, operated by French Total.

Production from the 60,000 barrels per day field will be restored within three weeks, the oil ministry said on Friday.

In Nigeria, Africa's largest oil producer, militant attacks have cut about 25% of its production capacity.

On Friday, Chevron said it was evacuating hundreds of nonessential personnel from offshore operations in the OPEC producer nation due to security concerns.

Militant attacks this month have prompted Chevron to cut production by 42,000 barrels per day at its Escravos oilfields and by 15,000 bpd at its Pennington terminal.

Gunmen kidnapped four American oil workers from a barge off the Nigerian coast on Wednesday in the 10th attack on Western oil facilities in nine days.

"The oil market remains worried by the potential for oil supplies from Nigeria to continue to be disrupted by militant activity," said David Moore, strategist from Commonwealth Bank of Australia, in a daily briefing.

Investors were also concerned by the state of U.S. gasoline stocks, which rose just 400,000 barrels last week, ending a 12-week decline that had dragged them far below seasonal norms.

"People are concerned about U.S. gasoline supply, which is in a big deficit versus last year and the five-year average. They are worried that even if runs do increase, stocks may be behind the normal curve," said Tony Nunan from Mitsubishi.

June RBOB gasoline rose another 2.6 cents or 1.1% on Friday to settle at $2.3521. This week, RBOB jumped 13.57 cents or 6.1% -- the biggest weekly percentage gain since February.

June heating oil gained 1.98 cents or 1.1% to settle at $1.8823 -- the highest settle since May 1.

Symbol
Price
 
Change
%Change
EME
---
FEINX
---
LLY
---

The IEA, energy adviser to 26 industrialized nations, called on Friday for the Organization of the Petroleum Exporting Countries to boost oil output before the summer to prevent a sharp decline in consumer nations' crude stocks.

"We see a big, 1.6 million barrel a day crank up in global demand in June and there are still constraints in the refining side," said Lawrence Eagles, head of the IEA's Oil Industry and Markets Division.

"We need to start getting the crude in place now to avoid a stock draw."

Contact U.S. News

  • CNBC NEWSLETTERS

    Get the best of CNBC in your inbox

    To learn more about how we use your information,
    please read our Privacy Policy.
    › Learn More

Don't Miss

U.S. Video