Supply Risks Support Oil Near Three-Year High
By Sarah McFarlane
Oil prices steadied below a three-year high on Thursday, underpinned by geopolitical risks, with Nigeria the latest producer facing threats to its supply.
Brent crude, the global oil benchmark, fell 0.02% to $69.36 a barrel on London's ICE Futures exchange. On the New York Mercantile Exchange, West Texas Intermediate futures were trading down 0.02% at $63.95 a barrel.
Reports on Wednesday that militants in Nigeria issued a statement warning they would target offshore oil facilities in the coming days kept investors on edge. Consultancy Global Risk Management said attacks by militant groups in the Niger Delta in 2016 were partly responsible for Nigeria's production falling to around 1 million barrels a day from a peak of 2.2 million barrels.
Oil prices broke above $70 a barrel last week for the first time since 2014, in part boosted by concerns over unrest in countries including Iran and Venezuela, which could lead to supply disruptions.
"The market has woken back up to political uncertainty, geopolitical risk," said Edward Bell, analyst at Dubai-based Emirates NBD Bank, pointing to increased risk in oil producing regions including the Middle East and West Africa.
Tightening supplies have also helped push prices higher, with efforts by the Organization of the Petroleum Exporting Countries, along with producers including Russia, to cut output and drain global stocks.
"What's gotten us up this far is the effort done by OPEC and their partners in restricting production," Mr. Bell said.
Late last year OPEC and its allies agreed to continue cutting output throughout 2018.
Crude stocks in the U.S. have been steadily falling, supporting the view that the cuts are having an impact. The U.S. Energy Information Administration will report on Wednesday the latest weekly data.
Industry group the American Petroleum Institute, which reports weekly stocks ahead of the official data, said on Tuesday that U.S. crude inventories decreased by 5.1 million barrels in the latest week.
Nymex reformulated gasoline blendstock--the benchmark gasoline contract--rose 0.2% to $1.86 a gallon. ICE gasoil changed hands at $610.75 a metric ton, down $1.00 from the previous settlement.
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(END) Dow Jones Newswires
January 18, 2018 07:09 ET (12:09 GMT)Copyright (c) 2018 Dow Jones & Company, Inc.