MARKET WATCH: NYMEX oil prices volatile on Canada, Libya, Nigeria production issues

Light, sweet crude prices gained more than $1/bbl, reversing losses from the day before, in volatile trading as analysts and traders weighed the consequences of various production outages worldwide against lingering oil oversupply levels.

“This week has seen huge intraday volatility as markets are trying to determine direction of oil prices,” Michael Poulsen, Global Risk Management analyst, told the Wall Street Journal. “News is mixed: supply outages in Canada, Libya, and Nigeria continue.”

Analysts and traders also closely watch the weekly US inventory report from the Energy Information Administration, which was scheduled to be released May 11.

Oil sands companies in Alberta reportedly were preparing to restart oil production within days following wildfires that incinerated part of the Fort McMurray area. Some analysts estimated more than 1 million b/d of production was shut temporarily, largely because workers had to be evacuated.

In Libya, significant oil production is expected to be halted within a month unless a blockade is lifted on the port of Marsa el-Hariga, said National Oil Corp. of Tripoli.

“In less than 4 weeks, we will have to shut production completely because the tanks at Hariga will be full,” Mohamed Harari, NOC spokesman, said in an e-mailed statement to Bloomberg late May 10. "The blockade will cause serious harm and bring no benefits.”

Factions controlling eastern Libya said Apr. 30 that they would stop tankers from departing Hariga without their approval.

Separately, Bloomberg estimated Nigeria's oil output has slumped to a 22-year low citing pipeline sabotage and increasing unrest, resulting in major oil companies evacuating staff. Bloomberg reported that Nigeria oil production has fallen below 1.7 million b/d for the first time since 1994.

Rebels seeking what they call a fairer share of revenue for locals in the Niger Delta are causing security risks.

Last week, rebels from the Niger Delta Avengers group claimed responsibility for an attack on the Okan offshore operations operated by Chevron Corp., which has reported 35,000 b/d of crude was lost.

Royal Dutch Shell also reportedly evacuated most staff from its Eja production complex near Bonga field.

Energy prices

The June crude oil contract on the New York Mercantile Exchange gained $1.22 to settle at $44.66/bbl, and the July contract was up $1.32 to $45.35/bbl.

The NYMEX natural gas contract for June gained nearly 6¢ to a rounded $2.16/MMbtu. The Henry Hub price was $2.04/MMbtu, up 7¢.

Heating oil for June delivery rose 5¢ to a rounded $1.34/gal. The price for reformulated gasoline stock for oxygenates blending for June gained 4¢ to a rounded $1.48/gal.

The Brent crude contract for July on London’s ICE was up $1.89 to $45.52/bbl. The August contract rose $1.82 to $46.01/bbl. The May gas oil contract was $393.25/tonne, up $12.50.

The Organization of Petroleum Exporting Countries basket of crudes was $40.20/bbl, down 56¢.

Contact Paula Dittrick at

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