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| Oil, Gasoline Soar On Supply Worries |
349 Views |
| posted on Saturday, May 13, 2006 |
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OIL, GASOLINE SOAR ON SUPPLY WORRIES
Reuters
May 11, 2006
Original Link
NEW YORK - U.S. crude and gasoline futures ended sharply higher on Thursday as kidnappings in Nigeria and refinery snags in the United States stoked supply worries even though inventories rose last week.
Crude for June delivery settled up $1.19 at $73.32 per barrel on the New York Mercantile Exchange.
In London, June Brent crude rose 99 cents to $73.43 a barrel.
NYMEX June gasoline rose 5.02 cents to $2.2196 per gallon, while June RBOB gained 3.06 cents to $2.49.
June heating oil gained 3.17 cents to $2.0964 a gallon.
"Nigeria seems to be getting a lot worse and people have to take it a lot more seriously," said Phil Flynn, analyst at Alaron Trading in Chicago.
Three foreign oil workers were kidnapped in Nigeria's oil capital Port Harcourt on Thursday, a day after a U.S. oil executive was killed in the same city.
The militant Movement for the Emancipation of the Niger Delta (MEND), which has waged a campaign of attacks against the oil industry in the world's eighth-largest exporter, said it was not involved in the kidnapping.
After a rollercoaster ride, gasoline futures ended up as refinery snags spooked traders before the summer peak driving season.
Two Valero refineries in Texas and Louisiana had problems with their coking facilities over the last week, according to trade sources, while ConocoPhillips' Bayway refinery in Linden, New Jersey, was also running at reduced rates.
The supply worries came despite increases in petroleum inventory last week reported by the U.S. Energy Information Administration on Wednesday.
U.S. gasoline inventories rose by 2.4 million barrels to 205.1 million barrels.
Refinery utilization rose 1.4 percentage points to 90.2 percent of capacity, increasing gasoline production by 323,000 bpd to nearly 9 million bpd.
Average gasoline demand over the past four weeks fell 0.1 percent from a year ago to 9.14 million bpd.
Crude stocks rose unexpectedly by 300,000 barrels to 347 million barrels, their highest in almost eight years.
OPEC will ship 520,000 bpd more oil in the four weeks to May 27 to 24.78 million bpd, said Roy Mason of consulting group Oil Movements.
"The major surge in exports showing up are because long-haul sailings from the Gulf will be arriving in the third quarter when crude runs peak during the summer driving season," Mason told Reuters.
Venezuelan President Hugo Chavez said on Thursday he expected world oil prices to rise in the next few months as energy markets fret over U.S. tension with Iran and ongoing instability in Iraq.
International Energy Agency director Claude Mandil said on Thursday he was surprised record high oil prices had not had more impact in curbing demand.
"Maybe that's due to a time lag," Mandil said. "It needs recognition by the general public that they have to save energy ... It would be a good thing for demand to decrease."
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OIL PIPELINE EXPLOSION KILLS UP TO 200 IN NIGERIA
CNN
Friday, May 12, 2006
Original Link
LAGOS, Nigeria - Between 150 and 200 people were killed on Friday when an oil pipeline exploded in Nigeria, officials said, incinerating vandals as they tried to siphon fuel.
"You can see the corpses. Some are burned to ash. Others are remnants ... We estimate 150 to 200 people died," the police commissioner told Reuters news agency.
"It seems these people were literally incinerated, almost instantly," CNN's Jeff Koinange reported from Lagos.
Rescue workers dug a ditch near the exploded pipeline, the commissioner told The Associated Press, saying the bodies would be "given a mass burial."
A Reuters reporter said sand had been cleared from around the buried pipeline and that it bore marks of drilling.
"People insist on breaking into these installations in order to steal petrol in the pipes and it's difficult to man every pipeline in the country," Nigerian government spokesman Femi Fani-Kayode said.
"We don't have the people or resources, and I don't think anyone in the world does."
The fire from the blast has been extinguished, and Nigerian police officers have secured the scene. Nigerian officials say the pipe exploded on Snake Island.
"A number of villages were involved and came to assist and help our security agents," Fani-Kayode said.
Despite its oil riches, Nigeria's population remains impoverished and people often tap into pipelines crossing their lands, seeking fuel for cooking or resale on the black market.
Koinange reported that the fuel thefts can easily lead to tragedy because safety is not a concern, giving this example.
"This is a very common occurrence here in Nigeria ... vandals going in trying to steal petroleum products and a motorcycle backs up and a spot just hits the pipeline and explodes," Koinange said.
"This is caused by hunger and greed. If you've got no job and you're hungry you take advantage of anything to feed your family. Anyone who takes this kind of risk is desperate," Olanrewaju Saka-Shenayon, a Lagos State government official, told Reuters.
In September 2004, an oil pipeline exploded near Lagos as thieves tried to siphon oil from it, with up to 50 people perishing in the flames. A 1998 pipeline blast killed more than 1,000 in southern Nigeria.
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