Oil dips but holds over $67 on gasoline stock
SINGAPORE, Apr 7: Oil eased on Friday but stayed above after a large drop in U.S. gasoline stocks stoked worries about summer supplies, while there was no sign of a resumption in slashed Nigerian crude output.
U.S. crude oil futures traded 34 cents down at .60 a barrel by 0331 GMT, after gaining 87 cents on Thursday to the highest settlement since Jan. 30. London Brent crude traded 21 cents lower at .63 after hitting a seven-month high Thursday.
OPEC-producer the United Arab Emirates said the cartel was powerless to bring down prices, which have climbed 1.5 percent this week and are at their loftiest for a quarter of a century in real terms.
High OPEC output has led to bulging crude stockpiles in the United States, but production from OPEC-member Nigeria has been cut by militant attacks and U.S. gasoline stocks have fallen for five weeks in a row on slower refinery output.
''The continuing dispute over oil in Nigeria has provided further support despite ample crude inventory levels in the U.S.,'' said JPMorgan in a report. ''The market is more bullish on products as refineries are also undergoing maintenance.'' Nigerian Oil Minister Edmund Daukoru said late on Thursday he did not know when production at Royal Dutch Shell's 115,000 barrel-per-day offshore EA oilfield would resume. A day earlier he had said it would return on Thursday.
Shell said on Thursday there was no change in the situation, with 455,000 bpd of its oil output still closed by attacks. The firm has said repeatedly it will not begin repairs and clean-up work until it is safe to do so.
Hope for restoring production that has been shut for two months also dimmed after some of the militants involved in recent attacks said they would not participate in talks with the government.
Nigeria is a key supplier of gasoline-rich light crude to western and eastern markets, where gasoline demand soars in the northern hemisphere's summer as drivers take to the roads.
The U.S. Energy Information Administration (EIA) said gasoline inventories could fall sharply by the end of April if a large proportion of U.S. refining capacity undergoes maintenance.
U.S. oil firms face new environmental regulations that have the potential to trigger supply problems in the United States, consumer of 40 percent of the world's gasoline.
Oil prices have also been buoyed by the dispute between the West and Iran over the OPEC producer's nuclear programme.
The U.S. ambassador to the United Nations said on Thursday the U.N. Security Council could give Iran only two chances to curb its nuclear programme before imposing sanctions. Traders fear any sanctions could lead Tehran to disrupt oil supplies.
Investment fund buying has also driven commodities markets higher this week. Gold topped 0 an ounce for the first time since 1981 on Thursday while copper set a new record.