World oil prices higher after IEA report

Oil prices rose on Friday after the International Energy Agency warned of tighter supplies ahead and current unrest in Nigeria, the world's sixth-biggest crude exporter, traders said.

In London, the price of Brent North Sea crude for June delivery won 60 cents to 66.39 dollars per barrel in electronic trading.

New York's main oil futures contract, light sweet crude for delivery in June, added 34 cents to 62.15 dollars per barrel in electronic deals before the official open of the US market.

The Paris-based International Energy Agency said on Friday that global oil demand would dip slightly in 2007 but cautioned that oil and petrol markets could tighten, leading to further price rises.

In its latest monthly report, the IEA focused on political unrest in Nigeria, falls in global energy stockpiles and strains in the refining sector.

The agency reduced its forecast figure for global demand for oil in 2007 by 0.1 million barrels per day from its estimate in April, to 85.7 million barrels because of mild weather in the northern hemisphere and a slightly lower forecast for demand in China.

But it warned: ""With average (petrol) retail prices in the US near record highs at just over three dollars per gallon several weeks ahead of the start to the summer driving season, concerns over supplies are being raised."

The influential energy watchdog stressed that "underlying worries about product availability in the summer are concerns that geopolitics could threaten crude supplies, mostly in Nigeria."

Earlier in the week, crude futures had fallen after the US Departemen of Energy reported a surprisingly strong build-up in crude stocks of 5.6 million barrels.

The DoE report on Wednesday also showed a gain of 400,000 barrels in gasoline reserves -- the first rise since early February despite market concerns over tight supplies.

However, prices began rebounding Thursday on concerns about unrest in Nigeria, where output has been slashed by about one quarter owing to to a series of attacks on energy facilities in the crude-rich Niger delta.

London analysts said that Friday's gains were also underscored by violence in the country, which is the biggest oil producer on the African continent.

"There is clearly some support from the outages seen in Nigeria," said Calyon analyst Mike Wittner.

On Thursday, gunmen killed two policemen on the outskirts of Port Harcourt, Nigeria's oil capital, police there said, less than two days after three naval personnel were wounded when the construction vessel they were guarding offshore was attacked.

Four US oil workers had been seized by gunment in southern Nigeria, officials said Wednesday, adding to a list of dozens of foreigners taken hostage in recent weeks.

Source : news.yahoo.com