By Myra P. Saefong, CBS.MarketWatch.com Last Update: 10:52 AM ET Nov. 12, 2004
SAN FRANCISCO (CBS.MW) -- Fresh concern over production from the Middle East, Russia, and Nigeria lifted crude-oil futures back toward $48 a barrel early Friday, but prices remained below their week-ago level.
Continuing fighting in Fallujah, Iraq, and the chaotic scene surrounding Palestinian leader Yasser Arafat's burial in Ramallah should serve to remind traders that "the next headline from that part of the world could put prices higher again," John Kilduff, analyst at Fimat USA told clients in a note Friday.
Crude for December delivery climbed 26 cents to trade at $47.68 a barrel on the New York Mercantile Exchange. A week ago, it closed at $49.61.
December heating oil fell 0.28 cent to stand at $1.361 a gallon, while December unleaded gasoline traded at $1.252 a gallon, up 0.76 cent.
Prices also found some support from expectations that despite a high court's objections Thursday, Nigerian union workers will go ahead with a strike planned for Tuesday to protest high fuel prices. Nigeria is the fifth-largest U.S. oil supplier and the world's seventh-largest exporter.
But some oil traders are skeptical that the general strike will disrupt oil exports to any "serious degree," said Phil Flynn, a senior analyst at Alaron Trading.
And in Russia, the world's largest non-OPEC oil producer, government officials have "expanded their grip on oil prices by auditing tax payments made by several Russian oil companies," he said.
"If the Russian government uses strong-armed tactics like they did with Yukos, concern could grow that Russia is trying to nationalize its oil industry," he said. "Foreign investors would run and the Russian oil industry would be set back for years," he warned.
Meanwhile, investors continue to argue over the true state of U.S. supplies following the latest inventory reports, which were released Wednesday.
The Energy Department reported an eighth weekly decline in distillate inventories, for the week ended Nov. 5. But it also said crude supplies rose for a seventh week.
Cant believe those reports, the energy dept must be manipulating them.
