May 18 (Bloomberg) -- Crude oil rose above $58 a barrel after a Nigerian militant group threatened to block waterways used for energy exports and as an explosion and fire at a Sunoco Inc. refinery “impacted” operations in the U.S. Northeast.
The Movement for the Emancipation of the Niger Delta said in an e-mailed statement that ships moving through the southern part of the nation would be traveling at their own risk. Sunoco, the largest refiner in the Northeast, said the incident at the Marcus Hook plant, located on the border of Pennsylvania and Delaware, took place late yesterday.
“The situation in Nigeria is becoming increasingly unsettled,” said John Kilduff, senior vice president of energy at MF Global in New York. “The problems at the Sunoco refinery, which is a major supplier of gasoline to New York Harbor, are also giving the market a boost.”
Crude oil for June delivery rose $1.61, or 2.9 percent, to $57.95 a barrel at 9:54 a.m. on the New York Mercantile Exchange. The contract climbed as much as $2.04, or 3.6 percent, to $58.38. Futures are up 30 percent this year.
The June Nymex oil contract expires tomorrow. The more- actively-traded July contract rose $1.66, or 2.9 percent, to $58.66 a barrel.
Gasoline for June delivery rose 5.01 cents, or 3 percent, to $1.7307 a gallon in New York. Futures touched $1.7485, the highest since Oct. 21.
Energy futures also climbed after U.S. equities increased on better-than-forecast earnings by Lowe’s Cos. and analysts recommended Bank of America Corp. The Standard & Poor’s 500 Index rose 1.3 percent to 893.99. The Dow Jones Industrial Average increased 1.3 percent to 8,376.80.
Niger Delta Unrest
Fighting in Nigeria has escalated since May 13 when the Nigerian militants said they responded to an army offensive by attacking military positions and hijacking a tanker.
MEND claimed responsibility yesterday for rupturing two pipelines supplying oil and natural gas from a Chevron Corp. facility to domestic refineries and power stations. The rebel group has threatened to blockade waterways in the southern region used for oil and gas exports.
Nigeria produces low-sulfur, or sweet, crude oil, prized by U.S. refiners because of the proportion of high-value gasoline and diesel it yields.
Angola, Africa’s second-biggest oil producer after Nigeria, will cut daily shipments, excluding the Gimboa grade, by 6.8 percent in July. BP Plc, Total SA, Chevron Corp., Exxon Mobil Corp. and other companies are scheduled to load an average of 1.7 million barrels a day in July, compared with June’s 1.83 million, according to loading programs released through today.
Marcus Hook
There were no injuries at Marcus Hook and all personnel have been accounted for, Thomas Golembeski, a company spokesman, said in an e-mail. The refinery can process 175,000 barrels of oil a day, according to data compiled by Bloomberg.
“The fire, which is located at the ethylene unit, is contained and under control,” said Golembeski. “The cause of the fire is being investigated. Right now, our main focus is on protecting the health and safety of our employees as well as the surrounding community.”
Ethylene is a petrochemical product that is used as a building block for plastics. It is derived from naphtha and liquid petroleum gas.
Sunoco will be “optimizing operations at Philadelphia and Eagle Point” refineries to make “every effort to meet customer demand,” said Golembeski.
The Philadelphia refinery has a capacity of 330,000 barrels a day and the Eagle Point plant in New Jersey can process 150,000 barrels of oil a day.
Brent crude for July settlement rose $1.84, or 3.3 percent, to $57.82 a barrel on London’s ICE Futures Europe exchange.
