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The New York Times: Oil Prices Rise on Nigerian Violence

By THE ASSOCIATED PRESS
Published: July 6, 2007
Filed at 2:06 a.m. ET

SINGAPORE (AP) — Oil prices inched higher Friday in Asia, approaching US$72 a barrel, after renewed violence and kidnappings in Nigeria, Africa’s biggest oil producer.

Light, sweet crude for August delivery gained 4 cents to $71.85 a barrel in Asian electronic trading on the New York Mercantile Exchange, midmorning in Singapore.

Despite larger-than-expected increases in U.S. crude and petroleum product inventories, the contract advanced 40 cents Thursday to settle at $71.81 a barrel.

Kidnappers in Nigeria Thursday snatched a 3-year-old British girl as she was being taken to school in the country’s troubled southern oil region, officials said.

Kidnappers in the past have focused mainly on foreign, male workers at international oil companies, presumed by the kidnappers to have the resources for ransom payments. Family acquaintances said the child’s father works in the oil industry.

On Wednesday, gunmen attacked a Royal Dutch Shell PLC oil rig in Nigeria’s southern oil heartland and seized five foreign workers. Shell said no production was lost. The attack came as a Nigerian opposition group threatened to end a one-month truce on its attacks against the government and the nation’s oil industry.

The violence in Nigeria overshadowed a report by the U.S. Energy Department’s Energy Information Administration showing domestic gasoline inventories rose 1.8 million barrels in the week ended June 29. Analysts surveyed by Dow Jones Newswires on average had expected a 700,000 barrel increase.

Crude oil inventories, which were expected to fall 500,000 barrels last week, instead rose by 3.1 million barrels.

Inventories of distillates, which include heating oil and diesel fuel, rose 1.2 million barrels. Analysts had expected a 200,000 barrel decline.

But a lower-than-expected increase in refinery runs was disappointing, analysts said. Refinery utilization rose 0.6 percentage points to 90 percent last week, when analysts had expected a 1.1 percentage point increase.

Refiners have reported a number of outages this week, which means overall refinery runs aren’t likely to increase anytime soon, possibly clouding the outlook for inventories in weeks ahead.

August Brent crude lost 18 cents to $74.53 a barrel on the ICE Futures exchange in London.

Nymex heating oil futures dropped 0.47 cent to $2.0826 a gallon; natural gas prices fell slightly to $6.615 per 1,000 cubic feet.

http://www.nytimes.com/aponline/business/AP-Oil-Prices.html

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