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Oil edges higher, Nigeria supports

Nigeria’s 50,000 barrel-per-day Okono/Okpoho oilfield, declared force majeure after eight foreign workers were kidnapped from the offshore facility on Thursday.

“Nigeria remains a major risk to supply,” said Kevin Norrish of Barclays Capital. “People have got a little bit complacent about Nigeria. Overall we’d say things do look rather fraught there still.”

London Brent crude, seen now as more representative of global oil prices, was up 22 cents at $66.27 a barrel by 1100 GMT. US crude slipped 18 cents to $63.01.

Concern about Nigerian supply had eased on Thursday after Royal Dutch Shell said the Forcados oil export terminal might resume operations in June, more than a year after it was shut by militant attacks.

Even so, Shell declined to give a precise date for when production would be restored fully.

Brent has risen from a low of around $50 in January and hit a peak close to $70 in April. It has sat in a range of $65-$70 for the past month.

“There is nothing happening aggressively to push prices up or down at this juncture, but with Nigerian ... issues in the background, prices are still over $60 a barrel,” said Gerard Rigby of Fuel First Consulting.

The snag at Okono/Okpoho, operated by Saipem and SBM Offshore, comes as around 602,000 bpd of production is shut down in Nigeria -- about a fifth of capacity.

Field operators declare force majeure to protect themselves legally if they fear they cannot meet their contractual obligations to export oil due to circumstances outside their control.

Nigerian crude is particularly prized by refiners as it is easy to process into transport fuels.

Falling inventories of gasoline in the United States, the world’s largest oil consumer, ahead of the summer driving season when demand for the motor fuel peaks also supported prices.

US refiners, up against a series of technical problems, are struggling to meet demand and US gasoline stocks have fallen for 12 weeks in a row.