LONDON, (AP) -Crude-oil prices dropped Wednesday as traders awaited the weekly U.S. oil inventory report, a day after climbing above $60 a barrel on news of temporary supply disruptions.
Analysts are expecting the weekly report to show that U.S. supply of gasoline and distillates, which include heating oil and diesel fuel, dropped for the seventh straight week.
“Day-to-day events and commentary will continue to push prices up and down in the short term, but until something new of significant fundamental import surfaces, prices will most likely remain fairly close to the current range,” said John Kilduff at Fimat USA.
Light sweet crude for January delivery fell 23 cents to $59.94 a barrel in electronic trading on the New York Mercantile Exchange by midday in Europe. On London’s ICE Futures exchange, January Brent was down 26 cents to $60.13 a barrel.
Meanwhile Wednesday, gunmen in Nigeria seized seven hostages from an Italian oil supply vessel off the southern coast. Two private security contractors confirmed the overnight incident on a vessel belonging to Agip, a subsidiary of Italian oil giant Eni SpA.
The kidnappings were the latest in a series of attacks on oil installations in the volatile Niger Delta, where most of Nigeria’s oil is produced. Each attack raises market concern about how the violence may affect the oil supply.
Oil rose above $60 on Tuesday following news that the Trans-Alaska Pipeline was flowing at just 25 percent of its normal 800,000 barrel-a-day capacity, as strong winds disrupted tanker loading. Also, traders worried about shutdowns at Exxon Mobil Corp.’s refinery in Baytown, Texas, America’s biggest at 562,500 barrels a day, and Citgo’s 156,000 barrel-a-day refinery in Corpus Christie, Texas.
Oil prices have fallen by about 23 percent since hitting an all-time trading high above $78 a barrel in mid-July. They haven’t settled above $62 a barrel since Oct. 1, despite the Organization of Petroleum Exporting Countries’ announcement in mid-October that it would reduce output by 1.2 million barrels a day.
Skepticism that OPEC members are committing to production cuts, as well as milder-than-normal U.S. temperatures this fall, have moderated prices.
In other Nymex trading, heating oil futures dropped 1.35 cent to $1.7196 a gallon, unleaded gasoline was down 1.82 cents at $1.6145 and natural gas futures fell 1.9 cents to $7.969 per 1,000 cubic feet.