Oil steady, weighing Nigeria vote, McKee refinery

SINGAPORE, Apr 16 (Reuters) Oil prices steadied on Monday after dipping late last week on reassurances over U.S. summer gasoline supplies, although elections in Nigeria and the restart of a key mid-America refinery offered prompt support.

U.S. light, sweet crude for May delivery, which expires on Friday, fell 8 cents to .55 a barrel by 2340 GMT after slipping 22 cents on Friday.

Traders this week may focus closely on the expiration of the U.S.

contract, which is trading at a discount to third-month July and hit a record discount of nearly versus Brent last week due to swollen stockpiles in the Cushing, Oklahoma, delivery point for the contract.

''The market will be navel-gazing because of the expiry,'' said David Thurtell, analyst at Commonwealth Bank of Australia.

News on Friday could signal a reversal of the Cushing stock build.

Valero Energy Corp. said it was restarting its 170,000 barrel per day (bpd) McKee refinery in Sunray, Texas, whose outage since mid-February was a leading cause of the buildup in Cushing crude stocks.

Valero had said before that output would rise from 85,000 to 115,000 bpd by May, but that it would not reach full capacity again until year-end at the soonest.

The restart, coupled with government reassurances over summer motor fuel supplies, weighed more heavily on gasoline prices which led Friday's retreat with a 0.55 percent decline and fell a further 0.4 percent to SINGAPORE, Apr 16 (Reuters) Oil prices steadied on Monday after dipping late last week on reassurances over U.S. summer gasoline supplies, although elections in Nigeria and the restart of a key mid-America refinery offered prompt support.

U.S. light, sweet crude for May delivery, which expires on Friday, fell 8 cents to $63.55 a barrel by 2340 GMT after slipping 22 cents on Friday.

Traders this week may focus closely on the expiration of the U.S.

contract, which is trading at a $4 discount to third-month July and hit a record discount of nearly $7 versus Brent last week due to swollen stockpiles in the Cushing, Oklahoma, delivery point for the contract.

''The market will be navel-gazing because of the expiry,'' said David Thurtell, analyst at Commonwealth Bank of Australia.

News on Friday could signal a reversal of the Cushing stock build.

Valero Energy Corp. said it was restarting its 170,000 barrel per day (bpd) McKee refinery in Sunray, Texas, whose outage since mid-February was a leading cause of the buildup in Cushing crude stocks.

Valero had said before that output would rise from 85,000 to 115,000 bpd by May, but that it would not reach full capacity again until year-end at the soonest.

The restart, coupled with government reassurances over summer motor fuel supplies, weighed more heavily on gasoline prices which led Friday's retreat with a 0.55 percent decline and fell a further 0.4 percent to $2.1715 a gallon on Monday.

U.S. Energy Secretary Sam Bodman said on Friday that he was ''relatively confident'' of sufficent gasoline supplies during the peak demand season, countering concerns of a shortfall in fuel due to heavy refinery maintenance and recent outages.

U.S. gasoline inventories have tumbled more than 12 percent since early February, fuelling a 40 percent climb in prices.

NIGERIA ON RADAR Oil traders are also on alert over Nigeria, the world's eighth-largest exporter, for fear that presidential elections on April 21 could spark violence that further disrupts oil output, which has been cut by one-fifth for more than a year.

Election irregularities in state polls over the weekend -- a precursor to the presidential vote that is to be the country's first democratic transition of power -- sparked opposition parties to burn buildings, block roads and barricade election offices, but did not disrupt oil flows.

''Nigerian oil is always more important than other types of crude because of its importance to U.S. gasoline supply,'' said Thurtell.

Nigerian crude is light and low in sulphur, producing relatively more gasoline than most other grades.

An unusual late-season blast of frigid weather in the U.S.

Northeast, a voracious consumer of winter heating oil, may add to price support. Icy rain and gale-force winds hit the region on Sunday, with rare April snow expected.

Speculators in the NYMEX crude market boosted their net long positions to the highest in eight months in the week to April 10, regulators data showed on Friday.

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U.S. Energy Secretary Sam Bodman said on Friday that he was ''relatively confident'' of sufficent gasoline supplies during the peak demand season, countering concerns of a shortfall in fuel due to heavy refinery maintenance and recent outages.

U.S. gasoline inventories have tumbled more than 12 percent since early February, fuelling a 40 percent climb in prices.

NIGERIA ON RADAR Oil traders are also on alert over Nigeria, the world's eighth-largest exporter, for fear that presidential elections on April 21 could spark violence that further disrupts oil output, which has been cut by one-fifth for more than a year.

Election irregularities in state polls over the weekend -- a precursor to the presidential vote that is to be the country's first democratic transition of power -- sparked opposition parties to burn buildings, block roads and barricade election offices, but did not disrupt oil flows.

''Nigerian oil is always more important than other types of crude because of its importance to U.S. gasoline supply,'' said Thurtell.

Nigerian crude is light and low in sulphur, producing relatively more gasoline than most other grades.

An unusual late-season blast of frigid weather in the U.S.

Northeast, a voracious consumer of winter heating oil, may add to price support. Icy rain and gale-force winds hit the region on Sunday, with rare April snow expected.

Speculators in the NYMEX crude market boosted their net long positions to the highest in eight months in the week to April 10, regulators data showed on Friday.

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