Oil rose to $62 today as a deeper outage in Nigerian supply and concern that US gasoline may grow tight ahead of the upcoming driving season outweighed a lower global oil demand growth forecast.
Militant attacks have forced Nigeria to shut in a total 556,000 barrels per day of gasoline rich crude, an upward adjustment of nearly 100,000 bpd, since violence flared last month, the country's top oil official Edmund Daukoru said.
That news countered any bearish impact from the International Energy Agency's 290,000 barrel-per-day cut in 2006 global demand growth to 1.49 million bpd due to high oil prices.
At the same time, producers have boosted spare capacity which will lessen, but not remove, one of the factors that has pushed oil above $60, said the IEA. But it cautioned that the market's four-year bull run could be far from over.
"While there is reason to expect prices to soften if everything runs smoothly, the reality is that limited spare capacity and a bumpy road ahead are likely to support prices for some time," the IEA said in its monthly report.