LONDON (AFP) -World oil prices rose in London but dipped in New York on Monday after Royal Dutch Shell said it had resumed full output at a Nigerian facility which had been hit by unrest before the weekend.
News of a reopened gasoline (or petrol) pipeline in the United States also eased market fears over a possible supply crunch amid the ongoing peak-demand driving season.
Brent North Sea crude for July delivery won six cents to 69.13 dollars per barrel in electronic trading.
New York’s main oil futures contract, light sweet crude for delivery in July, fell 22 cents to 64.86 dollars per barrel in electronic deals before the official open of the US market.
Before the weekend, crude futures had spiked by more than a dollar as concerns mounted about Nigerian supplies amid reports that fresh unrest had forced Anglo-Dutch group Shell to suspend some of its oil exports.
“This morning, Royal Dutch Shell announced that it has resumed normal crude production at its 150,000 barrel per day Bomu pipeline hub in Nigeria, after the closure dude to civil protests last week,” said Sucden analyst Michael Davies.
“This news followed an announcement from US Colonial Pipeline who restarted a gasoline line from Atlanta to North Carolina, after being shut last Tuesday because of a leak.”
Prices had also garnered support last week from news that US crude reserves fell 2.0 million to 342.2 million barrels in the week ending May 25 — which confounded market expectations for an increase of 1.0 million.
American gasoline stockpiles rose by 1.3 million to 198 million barrels — which tallied with analysts’ forecasts.
However, below-average stock levels of gasoline have bolstered retail gasoline prices across the US.
Gasoline demand has entered its peak demand period as the US driving season gets underway with millions of Americans due to take to the nation’s highways en route to summer holiday hot spots.
Back in Nigeria — the world’s sixth biggest crude producer — traders kept a cautious eye on geopolitical developments.
“Over the weekend there was some bearish news from Nigeria, where the militant group, the Movement for the Emancipation of the Niger Delta (MEND) said they will halt attacks for one month to allow for talks with the new Nigerian government,” Davies added.
“However, hopes for calm in the region may have been short lived, with news of two separate kidnappings in the country over the weekend.”
Unrest in Nigeria, including a string of kidnappings of foreigners and pipeline attacks, have reduced the country’s oil output about 25 percent over the past year.