Oil Prices Fall in Volatile Trading
Monday April 16, 11:11 am ET
By Stan Choe, AP Business Writer
Oil Prices Fall Ahead of Expected Restarts at U.S. Refineries, Nigerian Elections
NEW YORK (AP) — Oil prices fell Monday in volatile trading ahead of Nigerian presidential elections that some fear could spark violence and disrupt oil supplies as well as restarts at U.S. refineries.
Light, sweet crude for May delivery dropped 86 cents to $62.77 a barrel in morning trading on the New York Mercantile Exchange. Earlier, it had climbed as high as $64.21.
Brent crude for June was down 69 cents at $67.94 a barrel on London’s ICE Futures exchange.
Citigroup Global Markets energy analyst Tim Evans said oil prices rose overnight after at least 21 people died in Nigeria in election-related violence. Nigeria is the world’s eighth-largest exporter and a main supplier of oil to the United States.
“There’s a sense in the ongoing market that when it fails to rally on bullish news, that all by itself is reason to sell,” Evans said. “I’m not saying that’s right, but that’s the psychology of the market.”
Forecasts for warmer weather helped to ease oil, natural gas and heating oil prices as well, he said.
Prices rose last week due to problems at several U.S. refineries and a decrease in U.S. gasoline stockpiles. Some refineries, including the McKee refinery in Texas, are expected to resume gasoline production this week, which should support prices.
The restarts should also help to tighten the spread between Nymex crude, which is delivered near the McKee refinery, and Brent crude.
“We will not know that refinery snag contagion has ended, until it ends. The bullish case is easy to make right now,” said John Kilduff at Fimat USA.
Gasoline supplies sank during the first week of April amid strong demand, with stockpiles down 5.5 million barrels to 199.7 million barrels, the U.S. Energy Information Administration reported Wednesday.
In other Nymex trading, heating oil futures fell 2.74 cents to $1.8733 a gallon while natural gas prices were down 24 cents to $7.561 per 1,000 cubic feet. Gasoline futures fell 3.25 cents to $2.1472 per gallon.
Associated Press Writer George Jahn in Vienna, Austria, contributed to this report.
Source: Yahoo! Finance