WASHINGTON – Oil prices fell slightly Thursday but held near $62 a barrel amid violence in Nigeria and concerns that OPEC may reduce output when it meets next week.
A government report on U.S. natural gas inventories showed underground storage shrank slightly last week, leaving total inventories 9 percent above the five-year average for this time of year.
In Nigeria, officials said gunmen attacked an oil export terminal in the south belonging to a subsidiary of Italy's Eni SPA, killing one person and taking three Italians hostage.
Since the beginning of 2006, militant groups in Nigeria have attacked pipelines and taken workers hostage in violence that has kept about 500,000 barrels a day of Niger Delta crude off the market, although output has grown offshore Nigeria.
Also keeping prices firm in recent weeks is uncertainty ahead of a meeting next week of oil ministers from the Organization of Petroleum Exporting Countries. OPEC officials have been pressing in recent days for a cut in output on top of a production cut of 1.2 million barrels a day, approved in October.
In its weekly natural gas report the Energy Department said underground storage declined last week by 11 billion cubic feet to 3.4 trillion cubic feet, well above last year's 3.2 trillion cubic feet at the same time and far above the 3.1 trillion cubic feet five-year average.
Citigroup analyst Tim Evans said natural gas prices should be falling based on the data released by the Energy Department. While last week's withdrawal of inventory was slightly more than the 9 billion cubic feet the market was anticipating, it was still well below the 63 billion cubic feet five-year average for this time of year.
Light, sweet crude for January delivery on the New York Mercantile Exchange fell 19 cents to $62 a barrel. January Brent crude at London's ICE Futures exchange fell 24 cents to $62.83 a barrel.
In its petroleum supply report released Wednesday, the Energy Information Administration, the U.S. Department of Energy's statistical arm, said domestic inventories of crude oil fell by 1.1 million barrels last week to 339.7 million barrels, or 5.4 percent above year-ago levels. Also, refinery utilization rose 2.4 percentage points to 90.5 percent of operating capacity, signaling to some analysts that the seasonal refinery maintenance period may be coming to an end, allowing output of transportation and home-heating fuels to pick up in the weeks ahead.
The data comes amid expectations of milder temperatures in the United States. Temperatures in the Northeast, the nation's largest heating oil market, were expected to moderate later in the week, with the National Weather Service forecasting above-normal temperatures through most of the nation next week.
Heating oil futures fell 1.65 cent to $1.7775 a gallon on the Nymex, where unleaded gasoline futures were up less than a cent to $1.625 and natural gas futures fell 9 cents to $7.636 per 1,000 cubic feet.