LONDON - Oil held above US$64 a barrel after hitting a near seven-week high overnight as renewed supply woes in Nigeria increased expectations of prolonged outages in Africa's largest producer.
Oil in New York surged 3.5 per cent on Thursday after Italian energy firm Eni said it could not honour
crude oil export commitments from its Nigerian Brass River terminal, after a pipeline attack last week.
"I'd be expecting Nigerian outages to last for another couple of months," said Deborah White of SG CIB Commodities in Paris. "It's not particularly that the situation has deteriorated, but it is indeed quite serious."
US light crude for May delivery CLc1 settled 35 cents higher at US$64.26 a barrel. It hit a peak of US$64.75 earlier Friday, the highest since Feb. 7.
London Brent crude LCOc1 settled 24 cents higher at US$63.51 after a surge of US$1.76 the previous day.
Eni's Brass River terminal loads around 200,000 barrels per day (bpd). The pipeline blast shut in 75,000 bpd of Eni's Nigerian output, but the company said on Thursday that if all went well, it could be repaired within a week.
Exports from Nigeria, a member of the Organisation of the Petroleum Exporting Countries and Africa's largest producer, have been cut back by attacks on oil installations there.
Royal Dutch Shell and other companies already have shut down 630,000 bpd of production, 26 per cent of the capacity in the world's eighth-largest crude exporter.
On Wednesday, a senior global maritime analyst at the US Office of Naval Intelligence, Charles Dragonette, told a conference that Nigeria was no longer able to ensure security in the delta region where it pumps most of its crude.
Oil production from the African country will "hang precariously in the balance" for some time, he said.
Crude oil has traded in a range of US$60-US$64 this week as traders' focus shifted between ample US crude inventories and concern about real or threatened supply disruptions, including tensions over Iran's nuclear programme.
Despite a surprise decline last week, US crude oil inventories stayed near seven-year highs, or 9 per cent above those of a year earlier.
"A force majeure declaration by Eni on its Nigerian crude exports, strong technical support and some delayed reaction to yesterday's US stocks data all pushed prices in the same direction," said David Thurtell of Commonwealth Bank of Australia in Sydney, of Thursday's price jump.
Traders also appeared to be shifting focus to expected lower refinery production in the US, the world's largest gas guzzler, due to planned maintenance and unplanned outages.
Oil prices are sensitive to any disruption to petrol supplies from US plants ahead of summer, when demand usually peaks for the motor fuel.
Exxon Mobil Corp. will close for routine work in May a petrol-producing unit at the largest refinery in the mainland US, according to traders. The one-month shutdown of the unit at the 564,000-bpd refinery in Baytown, Texas, is for planned work.
On Wednesday, Exxon shut down a crude unit and a coker at its refinery in Baton Rouge, Louisiana for 32 days, the company confirmed.
- REUTERS
LONDON - Oil held above US$64 a barrel after hitting a near seven-week high overnight as renewed supply woes in Nigeria increased expectations of prolonged outages in Africa's largest producer.
Oil in New York surged 3.5 per cent on Thursday after Italian energy firm Eni said it could not honour
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