Oil prices top $69 a barrel
By J.W. ELPHINSTONE, AP Business Writer
Tue Jun 19, 7:03 PM ET
AP Photo: Traders at the New York
Mercantile Exchange deal crude oil
futures on Tursday, June 19, 2007NEW YORK - Oil prices inched up Tuesday, setting a nine-month closing high, after labor unions in Nigeria rejected the government's efforts to avert a nationwide strike. Nigeria is Africa's biggest oil producer and one of the top overseas suppliers to the United States.
Light, sweet crude for July delivery on the New York Mercantile Exchange rose a penny to settle at $69.10 a barrel, the highest close since Sept. 1.
Labor unions on Tuesday rejected the Nigerian government's offer to halve a price hike on automobile fuel, only hours before its strike protesting the increase was set to begin.
The unions are threatening to target the strike action at the oil industry, with the aim of stanching oil exports that count for 90 percent of the government's income.
Continued violence in Nigeria also has kept oil prices within striking distance of $70 a barrel.
Recent attacks by villagers and gunmen cut supply at two Nigerian oil facilities. Hundreds of angry villagers chased workers away from a Chevron Corp. oil-transfer facility Monday in southern Nigeria. Gunmen also seized some two dozen Nigerian workers and security forces at a flow station operated by Italian energy giant Eni SPA's subsidiary Agip.
Militant leader Mujahid Dokubo-Asari, freed on bail, said Tuesday that armed groups in Nigeria's restive south will stop attacks on oil facilities to give the new government a chance to deal with the region's problems.
However, he warned there would not be an immediate end to the seizure of foreign workers.
Also supportive of crude prices is news of a potential strike by oil workers in Brazil. Workers at state-run oil firm Petroleo Brasileiro SA, or Petrobras, may go on a five-day strike beginning July 5, Brazil's main oil workers' union said in a news release.
"In a bullish market, every thimble full of oil counts," said Peter Beutel, president of U.S. energy risk management firm Cameron Hanover. "Every little bullish feature will loom large."
Traders are also looking ahead to the weekly inventory report from the Energy Information Administration due out Wednesday. According to analysts polled by Dow Jones Newswires, gasoline supplies, which were unchanged in last week's report at 201.5 million barrels, are expected to increase by an average of 1 million barrels.
A rash of refinery disruptions in the last several months have reduced gasoline supplies, which have been at the low end of historical averages during the summer driving season.
Refinery utilization is expected to increase by an average of 0.6 percentage point to 89.8 percent of capacity, following two straight weeks of declines.
Analysts estimate an average gain of 900,000 barrels to 123.5 million barrels for distillate stocks, which include heating oil and diesel fuel. Oil inventories are expected to fall by an average of 150,000 barrels.
Brent crude lost 34 cents to close at $71.84 a barrel on the ICE Futures exchange in London.
In other trading on the Nymex, gasoline futures slipped 2.97 cents to settle at $2.2346 a gallon. Heating oil futures dropped 0.74 cent to end at $2.0268 a gallon, and natural gas prices fell 17.1 cents to $7.519 per 1,000 cubic feet.
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Associated Press Writers Gillian Wong in Singapore and Pablo Gorondi in Budapest contributed to this report.
