Retail gas prices surge as unrest tightens oil supply
NEW YORK -- Gasoline prices stayed on their upward trajectory at the pump yesterday, while gas and oil futures settled higher on news that protests in Nigeria have cut oil production by 170,000 barrels per day.
The retail price of gas hit a record national average of $3.087 a gallon, up 1.4 cents overnight, according to AAA and the Oil Price Information Service. Prices are already approaching $4 a gallon in some parts of the country.
Meanwhile, in futures trading on the New York Mercantile Exchange, gasoline for June delivery gained 0.04 cent to settle at $2.3016. Light, sweet crude for June rose 71 cents to settle at $63.71 on the Nymex.
Heating oil futures rose 2.34 cents to settle at $1.8902 a gallon on the Nymex while natural gas prices fell 8.8 cents to settle at $7.864 per 1,000 cubic feet.
Brent crude for June delivery rose $1.28 to settle at $68.11 a barrel on the ICE Futures exchange in London.
Trading in energy futures continues to be driven by concerns about the tight US gasoline market. A combination of high demand for gasoline and low supplies, due to an unprecedented number of refinery outages this spring, has left gasoline inventories at historically low levels headed into summer.
Scattered continued reports of minor refinery outages continue, analysts say, giving traders further reason to drive prices higher.
But unrest in Nigeria also was a big contributor to yesterday's trading, said John Kilduff, an analyst at MAN Financial.
A Royal Dutch Shell PLC spokesman said protesters occupied an oil facility in southern Nigeria yesterday, and that the company is negotiating with them.
Nigeria is a major supplier to the United States of the light, sweet crude that's easiest to refine into gasoline. So any disruption of Nigerian supplies in an already tight domestic market unnerves traders, sending prices higher.
Traders will be closely watching today's government inventory report for the week ended May 11, which is expected to show US gasoline inventories rose by an average of 900,000 barrels, according to a Dow Jones Newswires survey. Distillate stocks, which include heating oil and diesel fuel, were likely to grow by 1.2 million barrels on average.