Oil prices climb on IEA supply worries

Oil prices rose Friday after a report from the IEA raised concerns about the market's ability to meet an expected jump in demand for oil products.

The International Energy Agency said Friday that the Organization of Petroleum Exporting Countries needs to raise output soon and raised concern over the ability of refiners and OPEC willingness to meet a 1.6 million barrels a day jump in oil product demand in June.

Suggestions by OPEC officials that there is no need to boost its production levels "appear wide of the mark" the agency said.

"Steady output at current levels would lead (OPEC) undershooting our calculated range for the call on its crude, and thus tightening stocks further," the IEA said.

Light, sweet crude for June delivery rose 35 cents to $62.16 a barrel in electronic trading on the New York Mercantile Exchange by midday in Europe. On London's ICE Futures exchange, June Brent crude rose 61 cents to $66.40 a barrel.

A day earlier, light, sweet crude prices rose amid broader gains in energy futures as traders noticed a gas supply imbalance in Wednesday's government inventory report.

The Energy Information Administration reported that gasoline stocks rose an average of 400,000 barrels last week, the first increase in 13 weeks. But a closer inspection showed much of that increase was due to a 1.1-million barrel increase in inventories on the West Coast only, not across the country.

The news caused gasoline futures for June delivery to jump 9.52 cents to $2.3261 a gallon on Thursday, and the U.S. national average price of gas at the pump rose to $3.037 a gallon.

With the start of summer driving season only weeks away, analysts are concerned that gasoline supplies, though rising, won't meet demand. Unplanned outages and scheduled maintenance at refineries, sluggish imports and strong demand have plagued gasoline stocks since early February. At least a dozen additional partial shutdowns have occurred in the U.S. and internationally that cut refining capacity.

Continued violence in Nigeria, Africa's largest oil producer and a leading supplier to the United States, has also been supporting higher oil prices. Kidnappings continued this week, and militants staged coordinated attacks on three pipelines in the wetlands region, knocking out nearly 100,000 barrels a day of crude oil.

Heating oil futures rose 1.7 cent to $1.8795 per gallon on the Nymex while natural gas prices slid 5.1 cents to $7.675 per 1,000 cubic feet.

Source : news.yahoo.com