Oil slipped back towards $67 a barrel on Friday on signs Nigeria would soon restore some lost output, but worries that top consumer the United States may run short of gasoline this summer gave the market a solid floor.
The head of Royal Dutch Shell's exploration and production division told reporters in Paris the company hoped to restart the smallest of its Nigerian oilfields soon, almost two months after rebels halted a quarter of Nigerian production.
US crude oil futures settled 55 cents lower at $67.39 a barrel, having closed on Thursday at their highest level since January 30. London Brent crude fell by the same amount to $67.29 after hitting a seven-month high on Thursday.
"We have got to go and review the assets (of the EA field) when the security situation allows but I am hopeful that will be soon," Shell's E&P boss Malcolm Brinded said.
Nigerian Minister of State for Petroleum Edmund Daukoru, also in Paris, said the move should help to moderate oil costs that are within sight of their $70 record and at their highest level for a quarter of a century in real terms.
"Oil prices should be in the upper $50s to lower $60s. Anything above $65 and everyone gets tense," he said.
Shell, Nigeria's biggest foreign operator, pulled out of parts of the Niger delta in February after rebel attacks on oil installations. The loss of around 500,000 barrels per day of high quality Nigerian oil - 455,000 bpd of it pumped by Shell - has contributed to a surge in prices.
The EA field produces only around 120,000 bpd and is far less significant than Shell's onshore Forcados field and export terminal that is also at a standstill.
Daukoru said he hoped Forcados would resume work "in about a month." Shell has given no indication on timing and has said it will not send its staff back until violence eases.
Analysts cautioned against betting on a swift return.
"What's most telling is that Shell is not sending its people in yet. Working in Nigeria has been dangerous for a long time but the fact the rebels started capturing foreign workers has given pause for thought," said Deborah White of SG CIB.
Shortly after Brinded and Daukoru spoke, the militants emailed a threat that they would execute anyone found on previously attacked Shell platforms.
Nigeria is an important supplier of gasoline-rich crude to world markets and the fifth biggest exporter to the United States, where gasoline demand peaks in the summer.
Prices were given a boost mid-week by US government data showing a larger than expected drop in gasoline stocks.
"The scene is set for some nail-biting later this year, as the United States' drivers get busy, the Gulf of Mexico's rigs watch for hurricanes, China's economy sucks up more energy, and the impasse with Iran drags on," analysts at Fortis Bank wrote.
"With crude prices nudging close to last August's peak, right now there's little leeway for the unexpected."
The head of the International Energy Agency said a shortage of refining capacity left consumer nations vulnerable.
"There is insufficient capacity there and there is a problem with conversion capacity," Claude Mandil said, referring to state-of-the art refineries that can maximise gasoline output.
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