Oil Settles Above $66 a Barrel
Oil prices rose 3 percent to a seven-week high Tuesday on worries over supply disruptions from Nigeria as the government moved to stem militant attacks on the OPEC member's pipelines and export terminals.
U.S. light crude shot up $1.91 or 2.8 percent to settle at $66.07 per barrel after hitting $66.20, the highest since early February. London Brent crude rose $1.36 to $64.97 a barrel.
Violence has already reduced Nigeria's output by about 630,000 barrels per day (bpd), or about 26 percent. Nigeria is the world's eighth largest oil exporter.
A spokesman for Royal Dutch Shell, the biggest oil operator in Nigeria and the company most affected by the violence, declined to say when production would resume.
Nigeria's president called for a meeting April 5 with groups from the oil producing Niger Delta after militants released three oil company hostages Monday.
Dealers were also watching a workers strike in France that lightly reduced operations at some refineries, ramping up fuel supply worries ahead of the summer driving season.
"The market is reacting to new threats out of Nigeria and some strike rumors in Europe," said Phil Flynn of Alaron Trading in Chicago. "But for this time of the year, this is nothing new. As we approach the summer driving season we tend to play out the worst case scenarios in our heads."
Prices have been locked over $60 for more than a month as investors balance geopolitical risks in Nigeria and Iran -- embroiled in a dispute with the West over its nuclear program -- with bumper U.S. fuel supplies.
Foreign ministers from the United States, Russia, China, Britain, France and Germany are due to meet Thursday to try to break the deadlock on how best to deal with Tehran.
Analysts expect U.S. crude stocks to have risen further last week, predicting an 800,000-barrel gain in government data due Wednesday. Analysts expect distillate and gasoline stocks to have each dropped more than 1 million barrels .
Adding to worries, the U.S. oil industry is phasing out gasoline additive MTBE in favor of ethanol and is cutting back sulfur content in diesel, moves that energy experts have said could boost prices despite high commercial inventories.
U.S. Energy Secretary Sam Bodman said on Tuesday he was not aware of any government plans to ease fuel regulations to ensure adequate supplies this summer driving season.
"We will, as best I know, be relying on the free market to respond," Bodman told reporters.
The head of OPEC's oil research unit, Adnan Shihab-Eldin, predicted U.S. crude would stay above $50 a barrel for up to three years.
CNN
U.S. light crude shot up $1.91 or 2.8 percent to settle at $66.07 per barrel after hitting $66.20, the highest since early February. London Brent crude rose $1.36 to $64.97 a barrel.
Violence has already reduced Nigeria's output by about 630,000 barrels per day (bpd), or about 26 percent. Nigeria is the world's eighth largest oil exporter.
A spokesman for Royal Dutch Shell, the biggest oil operator in Nigeria and the company most affected by the violence, declined to say when production would resume.
Nigeria's president called for a meeting April 5 with groups from the oil producing Niger Delta after militants released three oil company hostages Monday.
Dealers were also watching a workers strike in France that lightly reduced operations at some refineries, ramping up fuel supply worries ahead of the summer driving season.
"The market is reacting to new threats out of Nigeria and some strike rumors in Europe," said Phil Flynn of Alaron Trading in Chicago. "But for this time of the year, this is nothing new. As we approach the summer driving season we tend to play out the worst case scenarios in our heads."
Prices have been locked over $60 for more than a month as investors balance geopolitical risks in Nigeria and Iran -- embroiled in a dispute with the West over its nuclear program -- with bumper U.S. fuel supplies.
Foreign ministers from the United States, Russia, China, Britain, France and Germany are due to meet Thursday to try to break the deadlock on how best to deal with Tehran.
Analysts expect U.S. crude stocks to have risen further last week, predicting an 800,000-barrel gain in government data due Wednesday. Analysts expect distillate and gasoline stocks to have each dropped more than 1 million barrels .
Adding to worries, the U.S. oil industry is phasing out gasoline additive MTBE in favor of ethanol and is cutting back sulfur content in diesel, moves that energy experts have said could boost prices despite high commercial inventories.
U.S. Energy Secretary Sam Bodman said on Tuesday he was not aware of any government plans to ease fuel regulations to ensure adequate supplies this summer driving season.
"We will, as best I know, be relying on the free market to respond," Bodman told reporters.
The head of OPEC's oil research unit, Adnan Shihab-Eldin, predicted U.S. crude would stay above $50 a barrel for up to three years.
CNN
posted by Ottawa Gas Prices | 6:29 PM
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