Most energy futures were higher Friday in New York, and oil rose for a third straight session, meaning it has recovered nearly all the ground it lost during a selloff that opened the week.
July light sweet crude climbed $1.07 to $65.08 a barrel, while reformulated gasoline rose 4 cents to $2.24 a gallon. Heating oil moved 4 cents higher to $1.89 a gallon.
The July natural gas contract lost 6 cents to $7.88 per million British thermal units.
As has been the case for much of the last month, geopolitical issues and supply and storage figures all vied for the attention of traders.
"There seem to be various crosscurrents at work in the energy markets, and even within the sectors themselves, different influences are apparent, says Edward Meir, analyst at Man Financial. "Brent, it seems, is more sensitive to geopolitical tensions, particularly with respect to Nigeria, while
West Texas Intermediate remains a relative laggard, weighed down by ample stocks at
the Cushing, Okla., hub."
In Nigeria, community leaders expelled protesters from a
Royal Dutch Shell
oil pipeline hub that processes 150,000 barrels of oil a day. The protestors took control of the hub on Wednesday.
Elsewhere in the country, gunmen took three managers of an Indonesia-owned chemical plant hostage. Rebel groups have continued to sabotage oil facilities and kidnap foreign workers even though executive powers were transferred peacefully to Nigeria's newly elected president late last month.
"While Nigerian President Umaru Musa Yar'Adua has been making conciliatory remarks to the rebels, there is no sign that the government corruption is easing or that any oil revenues will be passed down to the impoverished citizens," according to Alan Mandel, analyst at Alan M. Trading. Thus, it appears that the guerilla war in Nigeria will continue, he says.
Meanwhile, a recent OPEC production survey by Reuters found that the oil cartel's production increased by 120,000 barrels a day in May. Higher production from Algeria, Saudi Arabia and the United Arab Emirates was primarily responsible for the increase.
The spread between the July WTI and Brent contracts has narrowed this week to about $4 from $5, suggesting that the WTI overhang in Cushing may be softening. Thursday's surprise 2 million barrel draw from crude stores reinforces this hypothesis. However, Brent's $4 premium over WTI is still unusual given that WTI has historically traded at a premium to Brent crude.
A string of refinery problems throughout North America during the spring led to a glut of crude oil in storage, especially in Cushing, which is the main delivery point for WTI crude oil. The excess has kept the price of WTI crude under pressure.
Higher commodity prices had energy stocks on the rise in late trading. The
CBOE Oil Index
rose 1.5% to 745.28.
advanced 2% to $78.88, and
gained 1.1% to finish at $82.04.
was up 1.1% to $83.98.