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Oil Prices Steady As Gasoline Futures Gain

Posted on: Tuesday, 14 March 2006, 12:00 CST

By GEORGE JAHN

VIENNA, Austria - Gasoline futures jumped Tuesday on word of a large refinery snag, but oil prices were steady after the International Energy Agency lowered its estimate for 2006 demand growth.

Gasoline futures rose almost 6 cents to $1.802 a gallon on the New York Mercantile Exchange.

A spokesman for Amerada Hess Corp. told Dow Jones Newswires that it unexpectedly shut a gasoline producing unit at a refinery in St. Croix that it co-owns with Petroleos de Venezuela SA. The spokesman said repairs could take up to two weeks.

Also putting some upward pressure on prices were analysts' expectations that U.S. government data released Wednesday would show a decline in gasoline inventories from a week ago.

Meanwhile, the International Energy Agency, a watchdog for the world's energy consumers, on Tuesday lowered its 2006 oil demand estimate by 290,000 barrels per day because of persistently high fuel prices and slowing consumption in Southeast Asia.

Light sweet crude for April delivery gained 8 cents to $61.65 a barrel on Nymex.

Nymex oil prices had surged $1.81 on Monday to settle at $61.77 on nagging concerns about unrest in Nigeria and the possibility of U.N. sanctions against Iran, the No. 2 producer within OPEC, for its nuclear ambitions.

In Nigeria, recent attacks by militants on pipelines and oil facilities have left the country's production down by about 400,000 barrels a day.

"We would expect the potential for further chaos in Nigeria to provide a floor for prices around $60 a barrel, and we expect Nigeria will continue to be a major issue in terms of supply security up to, and probably beyond, next year's elections," wrote Barclays Capital's analysts in a research note.

In other Nymex trading, heating oil futures fell 2.72 cents to $1.765 per gallon, and natural gas futures slipped 4.3 cents to $7.05 per 1,000 cubic feet.

Source: Associated Press/AP Online

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