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Oil rises on modest Saudi increase
(Agencies)
Updated: 2008-06-24 00:28 But any longer-term production increases are years away, Rafield said. "The oil summit really has not done much to temper oil pricing," said Victor Shum, an energy analyst with Purvin & Gertz in Singapore. "It was a modest output increase and hardly really compensates for the disruption out of Nigeria." Concerns about Nigerian production also boosted prices Monday. Royal Dutch Shell PLC said it cannot meet contractual obligations to export oil from a Nigerian oil field following a militant attack Thursday, and news reports say Chevron Corp. has been forced to shut down a Nigerian oil facility following a militant attack. Those production outages appeared to overshadow Sunday's ceasefire declaration by the Movement for the Emancipation of the Niger Delta, or MEND, the main militant group in Africa's largest oil producing nation. Attacks by MEND have sliced about one quarter from Nigeria's normal oil daily oil output, helping buoy crude prices in international markets. Despite the ceasefire, investors are not convinced that lost Nigerian oil production will resume any time soon, analysts say. Keeping a lid on oil's gains Monday was the dollar, which rose against the euro. When the dollar gains ground, investors who bought commodities such as oil as a hedge against inflation tend to sell. Also, a stronger greenback makes oil more expensive to overseas investors. Many analysts believe the dollar's protracted decline has been one of the main reasons oil has nearly doubled in value over the past year. At the pump, meanwhile, the average national price of a gallon of regular gas slipped a tenth of a cent overnight to $4.072, according to AAA and the Oil Price Information Service. Prices have changed little since reaching a record of $4.08 one week ago. Analysts think gas prices are unlikely to change much as long as oil prices remain stuck in their recent trading range between roughly $130 and $140 a barrel. Oil futures are unlikely to break out of that range without major news concerning supply and demand, or the dollar, analysts said. "There's a general uncertainty," Lebow said. "There are forces on both sides," aiming to push prices higher and lower. In other Nymex trading Monday, July gasoline futures rose 1.58 cents to $3.455 a gallon, and July heating oil futures rose 3.27 cents to $3.8044 a gallon. July natural gas futures rose 16.5 cents to $13.159 per 1,000 cubic feet. In London, August Brent crude futures rose 85 cents to $135.67 on the ICE Futures Exchange. |
