New York – Gasoline prices stayed on their upward trajectory at the pump today, and gas and oil futures followed 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 area already above $4 a gallon in some parts of the country.
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 spooks traders, sending prices higher.
In futures trading on the New York Mercantile Exchange, gasoline for June delivery rose 2.41 cents a gallon to $2.3253.
Light, sweet crude for June was up 47 cents to $62.93 on the Nymex.
Heating oil futures rose 1.96 cents to $1.8864 a gallon on the Nymex while natural gas prices fell 6.5 cents to $7.887 per 1,000 cubic feet.
Brent crude for June delivery rose 58 cents to $67.41 a barrel on the ICE Futures exchange in London.
Trading in energy futures continues to be driven by concerns about the tight U.S. gasoline market. A combination of high demand for gasoline and low supplies, driven by 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.
“The market is on fire,” said Fadel Gheit, an analyst at Oppenheimer & Co.
But unrest in Nigeria also was a big contributor to Tuesday’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 today, and that the company is negotiating with them.
Traders will be closely watching Wednesday’s government inventory report for the week ended May 11, expected to show U.S. 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.
“The expectation is that refinery utilization should increase, and that the majority of the increase would be weighted toward production of gasoline,” said Brad Samples, an analyst at Summit Energy, noting that gasoline-producing units have been “down the most” amid a recent spate of refinery outages.
