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The New York Times: Gasoline Pipeline, Nigeria Truce Eyed

SINGAPORE (Reuters) – Oil prices ebbed on Monday after three days of gains as a major U.S. gasoline pipeline resumed pumping and some Nigerian militants called a one-month truce, although analysts saw little to suggest an end to 18 months of violence.

London Brent crude, current seen as a better gauge of global oil markets, fell 31 cents to $68.76. U.S. light, sweet crude fell 40 cents to $64.68 a barrel by 0143 GMT, ending a three-day rally that was capped by a $1 surge on Friday.

U.S. Colonial Pipeline Co. said on Sunday that it had restarted a gasoline line from Atlanta to North Carolina that had shut last Tuesday due to a leak. Delays to resuming operations on the line had spurred buying on Friday.

Despite steadily rising U.S. gasoline stocks, traders are on alert for signs that refiners may struggle to meet peak summer driving demand in the world’s largest oil consumer. Inventories are still more than 12 million barrels below their seasonal norm.

Friday’s gains were also fuelled by news that BP had again delayed the restart to some fire-damaged units at a major refinery in the Chicago area, traders said.

Anxiety persisted in Nigeria, where gunmen kidnapped six Russian smelter workers on Sunday, the day after one militant group, the Movement for the Emancipation of the Niger Delta (MEND), said it would halt attacks for one month to allow new talks with the government.

“I think that (kidnapping) tells you that the issue remains what it was for crude oil market, but perhaps there is something positive developing down the track,” said Tobin Gorey, commodity analyst with the Commonwealth Bank of Australia in Sydney.

MEND will “resume attacks on installations and oil works in the delta with greater purpose” after the one-month grace period, the group said on Saturday.

A third of Nigeria’s production has been shut in due to militant attacks and sabotage, although crude oil was again flowing through a major pipeline hub after protesters who had disrupted 150,000 barrels per day (bpd) of Royal Dutch Shell’s output were ordered by community elders to leave on Friday.

Dealers will remain on alert for any sign of hurricanes in the U.S. Gulf of Mexico after the Atlantic basin storm season began on June 1, although the first system of the season to approach the region — Tropical Storm Barry — weakened by the weekend, pouring rain on Florida.

Speculators in the U.S. crude oil futures market cut their net long positions again in the week to May 29, slashing them by more than 18,000 lots to just over 35,000 lots, according to regulatory data released on Friday.

Published: June 3, 2007 and its sister websites,,,,, and are all owned by John Donovan. There is also a Wikipedia article.

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