Quantcast

Oil rises on threatened Nigeria strike, short covering


Shutterstock photo

UPDATE 7-Oil rises on threatened Nigeria strike, short covering


* One of Nigeria's two main oil unions threatened a strike

* U.S. crude production rises 25,000 bpd to 9.71 mln bpd

* U.S. crude stocks down by 5.6 mln barrels at 448.1 mln

* Gasoline stocks gain 6.8 mln barrels to 220.9 mln

(Adds Nigerian strike threat, latest prices, quote; changes byline, dateline previous LONDON)

By Scott DiSavino

NEW YORK, Dec 7 (Reuters) - Oil prices climbed more than 1 percent on Thursday due to a threatened strike in Nigeria and as traders cover shorts after sharp losses the previous day brought on by an unexpectedly large rise in U.S. stocks of refined fuels.

"Short covering in the market, together with the threat of a strike by Nigeria's key oil union, has provided some support to oil prices in today's session," said Abhishek Kumar, senior energy analyst at Interfax Energy's Global Gas Analytics in London.

One of Nigeria's main oil unions threatened to go on strike from Dec. 18 over what it said was a "mass sacking of workers." The country is Africa's top oil exporter. urn:newsml:reuters.com:*:nL8N1O73VI

Brent futures LCOc1 were up 85 cents, or 1.4 percent, at $62.07 a barrel by 11:42 a.m. EST (1642 GMT), while U.S. West Texas Intermediate (WTI) crude CLc1 was up 63 cents, or 1.1 percent, at $56.59.

The previous day, Brent settled down 2.6 percent and WTI down 2.9 percent after an unexpected rise in U.S. fuel stocks. urn:newsml:reuters.com:*:nL3N1O61QQ

Data from the Energy Information Administration (EIA) on Wednesday showed that U.S. crude oil inventories fell by 5.6 million barrels in the week to Dec. 1, to 448.1 million barrels C-STK-T-EIA , putting stocks below seasonal levels in 2015 and 2016. API/SEIA/S

But gasoline stocks USOILG=ECI rose by 6.8 million barrels, well above the 1.7 million-barrel gain analyst had expected, and distillate stocks USOILD=ECI , which include diesel and heating oil, rose 1.7 million barrels. urn:newsml:reuters.com:*:nL1N1O6166

"It was a sharp correction yesterday, so it's a bit of a pause today," said Olivier Jakob, managing director of PetroMatrix, adding "technically, it's still very weak."

PVM Oil Associates also said in a note that "the weekly data was not as bad as it seems at first sight."

"Current (stock) levels are nearly 7 percent below last year and the surplus to the five-year average is only 3.9 percent," it said.

But troublingly for oil bulls, U.S. oil production C-OUT-T-EIA rose by 25,000 barrels per day (bpd) to 9.71 million bpd in the week to Dec. 1, the highest since monthly figures showing the United States produced more than 10 million bpd in the early 1970s. urn:newsml:reuters.com:*:nL1N1O6166

Soaring U.S. output threatens to undermine efforts led by the Organization of the Petroleum Exporting Countries (OPEC) and Russia to bring production and demand into balance following years of oversupply. urn:newsml:reuters.com:*:nL8N1O01I9

Sukrit Vijayakar, managing director of energy consultancy Trifecta, said there were "darker shadows over the pace of rebalancing, if ... any is taking place."

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
GRAPHIC: U.S. oil production and storage levels   http://reut.rs/2AyK29W
    ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
(Additional reporting by Amanda Cooper and Libby George in London and Henning Gloystein in Singapore; Editing by Marguerita Choy and Adrian Croft) ((scott.disavino@thomsonreuters.com; +1 646 223-6072; Reuters Messaging: scott.disavino.thomsonreuters.com@reuters.net))

Keywords: GLOBAL OIL/




This article appears in: Stocks , World Markets , Oil , Commodities


More from Reuters

Subscribe






See Reuters News









Research Brokers before you trade

Want to trade FX?