Oil Rises in $63 Range Supported by Nigeria Concerns
U.S. crude finished up slightly on Wednesday after Tuesday's sharp selloff and gasoline futures fell to a 3-week low ahead of weekly data on U.S. petroleum inventories.
A fresh attack on a Nigerian pipeline provided some support and illustrated the uphill task the new president faces to restore lost output in the world's eighth biggest oil exporter.
Analysts played down the impact of a 6.5% drop in Chinese stocks that sent ripples through other Asian and European markets.
"The stock market impact on Chinese growth is not big enough to influence oil. Few people in China have exposure to stocks," said Barclays Capital analyst Kevin Norrish.
U.S. crude settled up 34 cents or 0.5% at $63.49 . London Brent crude settled down 29 cents or 0.4% at $67.84 a barrel , after tumbling $1.58 Tuesday as more U.S. refineries returned to full operation after repairs.
"We can't say we were surprised by yesterday's move lower, but what did throw us was the extent to which key support levels were washed away. In this regard, we note that the technical damage was particularly pronounced in gasoline," said Edward Meir of Man Financial Energy Group.
Relatively low gasoline stocks in the United States at the start of peak summer demand helped drive Brent crude oil to a nine-month high above $71 last week. RBOB gasoline for June delivery fell 2.54 cents or 1.1% to settle at $2.2725 -- the lowest since May 9.
The next snapshot of oil demand and inventories in the United States is due on Thursday at 10:30 am New York time.
Analysts polled by Reuters forecast gasoline supplies rose last week by 1.3 million barrels after refineries boosted production at the start of the summer driving season.
The build would be the fourth consecutive weekly rise, but stocks are well below last year's levels with peak motoring demand traditionally starting during the Memorial Day weekend.
Royal Dutch Shell said it had begun restoring 150,000 barrels per day (bpd) of crude oil production halted after villagers sabotaged a major export pipeline in Nigeria for the second time this month.
The latest interruption came after the country's new president Umaru Yar'Adua, who took office Tuesday, said he would urgently address the crisis in the oil-producing Niger Delta.
Militant attacks have reduced the OPEC member's output of gasoline-rich crude oil by around a quarter.
"Market fundamentals are tightening steadily and OPEC production levels are too low versus demand," Norrish said.