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LONDON : World oil prices rallied on Thursday as the market focused on problems at US refineries ahead of the high-demand season for motor fuel, and unrest in crude producer Nigeria, traders said.
Crude futures had fallen on Wednesday after a US government report showed that American energy inventories had jumped by more than expected last week.
On Thursday, the price of Brent North Sea crude for July delivery jumped 1.24 cents to 69.21 dollars a barrel in electronic deals.
New York's main oil futures contract, light sweet crude for delivery in June, advanced 84 cents to 63.38 dollars per barrel in floor trading.
"Crude futures were higher ... on the back of refinery closures, (which are) reducing gasoline supplies ahead of the summer driving season in the US," said Sucden analyst Michael Davies in London.
The US Department of Energy said Wednesday that gasoline (petrol) reserves rose 1.7 million barrels to 195.2 million in the week ending May 11, above forecasts for a rise of 1.0 million barrels.
The gain followed an increase of 400,000 barrels the preceding week after steady falls for three months.
But news of recent US refinery glitches and shutdowns offset the increase in gasoline inventories, putting upward pressure on prices on Thursday, said Victor Shum, senior principal at Purvin and Gertz.
"The market is responding to refinery glitches ... A couple of weeks of inventories build doesn't turn the market around. The US summer driving season is around the corner. Is there enough time for US refineries to increase gasoline production?" Shum said.
The market has been concerned over tight gasoline supplies ahead of the holiday driving season, starting at the end of May, when many Americans take to the roads.
Traders are also tracking events in Nigeria, the world's sixth-biggest crude producer, where output has been slashed by about one quarter owing to recent rebel attacks on its energy facilities.
Home to Nigeria's multi-billion-dollar oil and gas resources, Port Harcourt and the Niger Delta region have seen an upsurge in kidnappings of foreign and local workers in recent months, mainly connected to the oil industry.
"Ongoing trouble regarding West African output...will have an obvious deleterious effect on future summer supplies," said analysts at energy consultancy The Schork Report.
- AFP /ls
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