HOUSTON, Aug. 31 -- The front-month crude futures contract inched above $70/bbl Aug. 30 in the New York market as oil workers' unions in Nigeria voted to strike in September to protest kidnappings and attacks on oil facilities in the Niger Delta.
Crude production is to be shut in during a 3-day "warning" strike at mid-September, union officials said.
The Energy Information Administration reported that strong demand for heating oil and diesel fuel is now supporting energy prices. With adequate gasoline inventories to get through the US Labor Day weekend, pressure on gasoline prices is diminishing, it said.
Meanwhile, the United Nations' International Atomic Energy Agency is to release its report Aug. 31 on Iran's uranium enrichment program, which many suspect could lead to construction of nuclear weapons. That is the deadline for Iran to halt the program or risk possible UN sanctions. Iranian officials so far have refused to end the confrontation and have threatened to curtail oil supplies if the UN takes action.
Elsewhere, after 7 weeks Iraq has resumed transporting crude from its Kirkuk fields to the export terminal at Ceyhan, Turkey, after repairing a leak a leak in the export pipeline. Iraq hasn't said how the leak occurred, but outside sources have indicated sabotage.
The October contract for benchmark US sweet, light crudes gained 32¢ to $70.03/bbl Aug. 30 on the New York Mercantile Exchange. The November contract increased by 23¢ to $71.09/bbl. On the US spot market, West Texas Intermediate at Cushing, Okla., was up 32¢ to $70.04/bbl. Unleaded gasoline for September delivery advanced by 1.27¢ to $1.80/gal on NYMEX. Heating oil for the same month increased 0.64¢ to $1.95/gal.
However, the new front-month October natural gas contract fell by 58.6¢ to $6.24/MMbtu. On Aug. 31, EIA reported the injection of 48 bcf of natural gas into US underground storage in the week ended Aug. 25. That was below the consensus of Wall Street analysts and down from injections of 57 bcf the previous week and 58 bcf during the same period last year. US gas storage now stands at 2.9 tcf, up by 280 bcf from year-ago levels and 320 bcf above the 5-year average.
In London, the October IPE contract for North Sea Brent crude gained 32¢ to $70.18/bbl. September gas oil lost $5.25 to $628.25/tonne.
The average price for the Organization of Petroleum Exporting Countries' basket of 11 benchmark crudes declined by 34¢ to $65.06/bbl.
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