Crude oil prices rose on Friday, supported by concern that weekend elections in Nigeria increased the risk to energy supply from the world's eighth-largest exporter. Heavy gunfire and explosions broke out near the headquarters of the Bayelsa state government in Nigeria's oil-producing delta on the eve of the elections, witnesses said late Friday.
About 500,000 barrels per day of Nigerian oil output has already been shut down for over a year due to attacks on oil installations and at least 50 people died in violence surrounding Nigerian state polls last week. "We are concerned going into this weekend with the Nigerian elections," said Kevin Blemkin, a broker at Man Financial.
London Brent crude settled up 55 cents to $66.49 a barrel. The front-month contract for US crude, which expired at the end of the session, settled up $1.55 at $63.38 a barrel. The jitters over Nigeria added to expectations the United States could have tight gasoline supply this summer driving season after a prolonged stretch of low production from the nation's refiners cut stocks 13 percent since early February.
US fuel inventory data on Wednesday showed the 10th consecutive weekly decline in gasoline stockpiles, though a 2 percentage point rise in refinery processing rates helped assuage some worries.
The dispute over Iran's nuclear work may also keep traders cautious even after diplomats said its production of nuclear fuel was only a test-scale operation, and was not producing significant amounts.
Iran has been pushing forward with its nuclear program in defiance of United Nations resolutions. The United States is concerned Tehran is seeking to build an atomic bomb instead of its stated goal of producing nuclear energy for civilian use. While traders eyed the risk of threats to Nigerian supply, developments there this week had previously pressured prices.
Nigeria said it aimed to restart by end-May the 380,000 bpd Forcados oilfields, shut by violence since early 2006. About 3.8 million barrels is scheduled for export in June, according to trade sources.