Oil prices rise as gasoline futures rally

March 11, 2006 - 0:0
LONDON (AP) -- Crude-oil prices rose Friday following a sharp rally in gasoline futures and renewed worries about violence in Nigeria and Iran's nuclear program.

Light, sweet crude for April delivery gained 20 cents to $60.67 a barrel in electronic trading on the New York Mercantile Exchange by midday in Europe. Brent crude futures on London's ICE Futures exchange rose 50 cents to $61.56 a barrel.

Gasoline rose nearly a cent to $1.7275 a gallon, a day after gaining almost 7 cents. Gasoline futures rallied on expectations that inventories would be drawn down as refineries in the United States reduce output while undergoing spring maintenance.

The U.S. Energy Information Administration reported Wednesday that commercial gasoline stocks fell by 1.1 million barrels to 224.8 million barrels last week as refiners lowered utilization by 2.2 percentage points to a relatively low 83 percent of operating capacity.

Heating oil was flat at $1.7200 a gallon, while natural gas rose 1.5 cents to $6.616 per 1,000 cubic feet.

Oil markets have been on edge over militant attacks on oil facilities from the Middle East to Nigeria and the confrontation over Iran's nuclear program. Kuwaiti oil minister Sheik Ahmed Fahd Al Ahmed Al Sabah has said he believes political turmoil and extremism have added $5 to $8 to the price of a barrel of oil.

European Union foreign ministers were to take stock Friday of international efforts to get Iran to resolve concerns over its nuclear program, an issue that is raising the prospect of U.N. sanctions against Tehran.

In Nigeria, a militant group holding three foreign oil workers hostage said its fighters clashed with army troops this week in the country's oil-rich Delta.

The militants said in an e-mailed statement that one of their vessels was attacked Wednesday on the Escravos River by four Nigerian navy patrol boats, sparking a 45-minute gun battle they claimed left seven government soldiers dead.

Recent attacks by militants on Nigerian pipelines and oil facilities have left the country's production still down by about 400,000 barrels a day. Analysts said the renewed violence dampened hopes that Nigerian production can soon return to normal.