RTRS: Oil rises 3.5 percent on Nigeria, U.S. refinery fire
Oil prices rose more than 3.5 percent on Monday as violence in Africa's top crude exporter Nigeria and a fire at a key U.S. East Coast refinery revived concern about supplies.
U.S. crude for June rose $1.98 to $58.32 by 10:55 a.m. EDT, while London Brent for July rose $2.00 to $57.98.
The gains came after Nigerian militants said they had blown up two oil and gas pipelines in the Niger Delta and would blockade waterways in the region in an effort to disrupt energy exports from the OPEC country.
In the United States, an explosion rocked Sunoco's oil refinery in Marcus Hook, Pennsylvania, sparking off a fire and disrupting production from the 178,000-barrel-per-day plant heading into peak summer driving season.
"The Nigerian stories probably would not have much of an impact on their own, but combined with the refinery glitches are contributing to a positive start to the week," said Tony Machacek, a broker at Bache Commodities.
Machacek added that a weaker U.S. dollar and early gains in equity markets was adding to oil's gains.
OPEC MEETING LOOMS
Oil has risen from a near five-year low of $32.40 reached in December as the market has tracked a rally in equities underpinned by hopes of an economic recovery.
European stocks rose and U.S. equities got off to a stronger start Monday. .N The dollar weakened, boosting the appeal of oil and other commodities to some investors.
Besides firmer equities, supply curbs by OPEC have also bolstered prices. The group, which has agreed to cut 4.2 million barrels per day (bpd) of output since September, meets on May 28 to decide production policy.
So far, comments from ministers from the Organization of the Petroleum Exporting Countries suggest the group is unlikely to reduce supply further. But prices are still lower than some in the group would like.
Iranian President Mahmoud Ahmadinejad said on Monday that OPEC's second largest oil exporter considered an oil price of $80 to $90 barrel as "suitable," the semi-official Mehr news agency reported.
The June U.S. crude contract expires Tuesday and dealers said trading may be more volatile than usual as a result.
