Oil passes $60 on supply fear, Nigeria strife

Oil prices pushed past $60 a barrel Monday because of fears about new OPEC production cuts and increased violence in Nigeria. Retail gasoline prices were mixed during the last week, dropping slightly in California while gaining less than a penny a gallon around the nation, a federal report showed.

In New York futures trading, light, sweet crude rose $1.08 to close at $60.32 a barrel, the highest level since Nov. 9. The price move occurred one day after the London-based newspaper Al Hayat reported that Saudi Arabian Oil Minister Ali Ibrahim Naimi said his country might support a second round of production cuts.

In October, the Organization of the Petroleum Exporting Countries said its members had agreed to trim daily output by 1.2 million barrels starting Nov. 1 to stabilize prices.

The oil-price increase also reflected concerns that a bloody effort to rescue kidnapped oil workers in Nigeria last week might trigger escalating violence. A hostage was killed and another was wounded Wednesday, after the Nigerian navy tried to free workers who had been abducted from an Italian oil supply vessel.

“The usual thing is a cat-and-mouse game where workers are kidnapped and then let go after two or three days,” said Phil Flynn, vice president and senior market analyst for Alaron Trading Corp. in Chicago. “This time, they tried to go after the kidnappers. Now that someone has actually been killed, it ratchets up the danger level for oil workers there.”

Saudi Arabia is the largest member of OPEC, which produces more than a third of the world’s crude oil. Nigeria, also an OPEC member, is the fifth-ranked source of U.S. oil imports, according to the Energy Department.

The National Weather Service also predicted colder-than-normal temperatures for the first week of December, which would probably increase demand for home heating oil.

But the average price of a gallon of self-serve regular gasoline remained fairly steady, according to the Energy Department’s weekly survey of filling stations, up 0.7 of a cent nationally to $2.246 a gallon.

The U.S. average was 9.2 cents higher than the average price for the same week in 2005. It marked the third consecutive increase and the fourth rise in the last five weeks.

The biggest jumps occurred in New England, where the average price rose 2.8 cents to $2.249 a gallon, and in the central Atlantic states, which saw a 2.7-cent increase to $2.263 a gallon.

California’s average price slipped 0.2 of a cent to $2.493 a gallon. The latest price was 8.1 cents above the average for the same week a year earlier.

Tom Kloza, chief oil analyst for the Oil Price Information Service in New Jersey, predicted little change during the coming weeks.

“There is a hint of equilibrium out there. December is a decent month for driving demand, but then it falls down off the charts again in January,” Kloza said. “Whichever way prices go, it will be a slow drift.”

ron.white@latimes.com