Oil prices hit another record on Friday, trading as high as $53.40 a barrel, on supply worries ahead of a planned oil worker strike in Nigeria and delays in post-Hurricane Ivan US output recovery efforts. US light crude settled at $53.31 a barrel, up 64 cents, the fourth day in a row prices set all-time highs on the New York Mercantile Exchange.
London Brent set a record at $49.75 a barrel before easing slightly to close at $49.71, up 81 cents on the day, on the International Petroleum Exchange. Traders said Brent was boosted by gas oil futures, which rose amid worries over shortages of heating oil ahead of peak northern winter demand.
In Nigeria, a two-day wildcat strike by oil workers at Royal Dutch Shell - which had bolstered prices this week - ended Friday without affecting exports.
But the world's seventh largest crude exporter faced a much more damaging general strike Monday, which may have a large impact on Nigeria's 2.3 million barrels per day of output, unionists and analysts said.
"A strike of this nature would have a huge impact on the oil industry ... if the oil unions join, production and loadings could be disrupted," said Emmanuel Etaderihi of Lagos-based Financial Derivatives Co.
Nigeria supplies refiners in the United States, Asia and Europe with the high-quality crude grades prized for refining transportation and heating fuels.
A production outage in Nigeria may exacerbate stretched supplies already stressed by the loss of US production from the Gulf of Mexico, where 475,000 bpd remains out of commission more than three weeks after Hurricane Ivan hit the region.
This outage, coupled with last month's refinery closures during the hurricane, have hindered efforts to build US heating oil inventories ahead of winter, when demand for the fuel peaks in the US Northeast.
US heating oil prices have hit record highs on concern that supplies will tighten further as temperatures drop.
In addition, stormy weather and high seas shut down crude oil tanker offloading operations on Friday at the Louisiana Offshore Oil Port, a major conduit for US crude oil imports.
The LOOP, as it is known, unloads around 900,000 bpd of imported crude oil from tankers in the Gulf of Mexico and about 500,000 bpd of domestically produced crude oil from the offshore Mars platform.
"The shutdown at the LOOP and threat of another strike in Nigeria have added to worries about tight supply," said Phil Flynn, market analyst at Alaron Trading in Chicago.
The stormy weather in the gulf Friday also halted some post-Hurricane Ivan repairs aboard damaged oil drilling platforms, and work could be interrupted until Monday, an industry official said.
Strong demand growth, particularly in China, has helped oil surge 60 percent this year, prompting the Organisation of Petroleum Exporting Countries to pump at a 25-year high and leaving little margin for supply disruptions or refinery outages.
"Demand growth is outstripping supply growth and there's very little prospect for that to change," said Rus Newton of commodities hedge fund manager Global Advisors.
"Prospects of maintaining supply growth at current levels are extremely limited."
Economists are keeping a close eye on the impact of fuel costs on global economic growth.
Comments
Comments are closed.