Oil Settles Above $66 on Renewed Nigeria Concerns
U.S. oil surged more than a dollar to its highest settle in three weeks as unrest in Nigeria kept markets on edge for further supply disruptions from Africa's top exporter.
U.S. crude for June delivery jumped $1.33 or 2% to settle at $66.27 a barrel . London Brent pushed well past the $70 mark having earlier risen to $70.83.
June RBOB gasoline finished down just 0.64 cents or 0.3% at $2.4013 , after a choppy session where prices moved in a range from $2.36 to $2.4262.
June heating oil futures rallied 3.57 cents or 1.9% to $1.9509 , the highest settle for the front month contract since September 1, 2006.
Unknown assailants broke into an unused Nigerian oil well operated by Total this morning, causing a minor spill, a company spokesman said. There were no injuries nor any impact on oil output.
Rising violence in Nigeria since February 2006 has cut a third of the OPEC nation's oil output and forced thousands of expatriates to evacuate.
"The uncertainty over Nigeria oil production and the continuing worries over U.S. gasoline supply seem to be behind this latest rally on crude," said Phil Flynn, analyst at Alaron Trading in Chicago.
Sources at private security firms had earlier reported an attack on a Total oil facility in Nigeria using high explosives. The French company said no explosives were used.
Ongoing refinery problems in the United States have drawn down gasoline stocks ahead of the peak summer gasoline demand season, propping up prices in recent weeks.
Despite the prolonged Nigerian outage, oil ministers from the Organization of the Petroleum Exporting Countries were satisfied that demand for crude oil was being met.
"The market is very well supplied, in fact it is oversupplied," OPEC President Mohammed al-Hamli, who is also oil minister for the United Arab Emirates, told Reuters today.
OPEC is due to meet on Sept. 11 to decide output policy.
Prices also drew support as Iran, the world's No. 4 oil exporter, pressed ahead with its atomic work.
A senior Iranian official said on Saturday the country has started building its first domestically made atomic power plant -- a move which could deepen Tehran's standoff with the West
over its nuclear program.
The West fears Iran's atomic work is aimed at making weapons. Tehran says it only wants to produce electricity.
"In the next decade Iran will be one of the most talked-about countries in the world regarding domestic nuclear energy," Mohammad Saeedi of Iran's Atomic Energy Organization was quoted as saying by the ISNA news agency.