NEW YORK -- Instability in Nigeria and bargain hunting in the wake of a collapse in the previous session help push oil higher Friday, though the rally may be short lived.
After a brief lull last month, the militant Niger Delta Avengers staged at least two attacks on oil installations in southern Nigeria this week, with attacks confirmed Friday on a pipeline operated by a subsidiary of Italian energy company Eni.
Oil prices collapsed Thursday after an early positive start following reports that crude oil left storage facilities at a slower pace than many analysts had expected. Profiteering may in part be behind a rally Friday, with the price for Brent crude oil gaining 1 percent to $46.89 per barrel. West Texas Intermediate, the U.S. benchmark price for oil, moved up 1.2 percent to start the day at $45.70 per barrel.
In its latest reporting, OPEC characterized the level of excess supply as "massive" despite recent draws. Anthony Starkey, an energy analyst with Platts Analytics, said storage hasn't dropped off much because more foreign oil is showing up on U.S. shores because of the slowdown in domestic production and because of the narrow difference in the price for WTI and Brent, or the spread.
"Imports of crude oil have been higher than many people expected," he said in response to emailed questions. "There are economic reasons for this -- a narrow WTI-Brent spread -- as well as fundamental reasons -- U.S. production in decline."
Friday's rally may deflate on weaker labor figures from the United States. Oil prices started off strong Thursday after weekly figures showed modest gains in U.S. employment. The U.S. Bureau of Labor Statistics reported the unemployment rate in June increased 0.2 percent to 4.9 percent. Those people without a job for more than 27 weeks, considered long-term unemployment, has not changed much and represents just over a quarter of the total number of those without a job. UPI
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