LA Times – Oil prices soared Tuesday as tensions grew over key Persian Gulf oil shipments.

In afternoon trading benchmark crude jumped $3.80, or 3.8 percent, to $102.63 per barrel in New York.

Brent crude, which is used to price foreign oil varieties that are imported by U.S. refineries, rose $3.87, or 3.6%, to $111.25 per barrel in London.

Prices climbed as soon as exchanges opened for the first day of 2012 trading. Commodity prices tend to rise at the beginning of January as investors start the new year with a fresh round of trading. This year prices were driven by heightened concerns that Iran might try to close the Strait of Hormuz in the Persian Gulf to oil tankers, if Western nations impose new sanctions.

Iran warned the U.S. to stay out of the strategic waterway, where one-sixth of the world’s oil shipments pass every day. On Monday its navy fired a cruise missile as part of a military exercise.

The U.S. and European nations are mulling further economic sanctions against Iran because of its nuclear program. A standoff could result that would be damaging to the global economy.

A dustup with Iran could slow crucial oil supplies at a time when the world needs every drop. Global oil demand is expected to rise to a record 89.5 million barrels per day in 2012.

Three of the world’s largest economies — the U.S., China and India — continued to grow with increased manufacturing activity in December.

A private trade group said that U.S. manufacturing expanded last month at the fastest pace in six months. The Commerce Department also said that U.S. construction spending jumped in November on a spate of new projects for single-family homes and apartments.

In other energy trading Tuesday, heating oil rose 12 cents, or 4.2%, to $3.04 per gallon, while gasoline futures rose by 8 cents, or 3 percent, to $2.74 per gallon. Natural gas was virtually unchanged at $2.99 per 1,000 cubic feet.

NEW YORK (AP) – Oil prices climbed to near $100 per barrel Tuesday following a series of positive reports about the U.S. economy.
In midday trading benchmark crude rose 36 cents to $98.50 per barrel in New York. Crude jumped as high as $99.34 at one point. Brent crude, which is used to price many foreign oil varieties, rose 45 cents to $112.34 per barrel in London.
Prices jumped after the U.S. said that consumer spending rose in October for the fifth straight month. Spending increased for electronics, appliances, hardware and building supplies. Sales also rose at grocery stores, bars and restaurants and health care stores. Inflation eased last month, as companies paid less for gas, new cars and other goods.
The European Union also said that the 17-nation bloc avoided contracting in the third quarter. The eurozone economy grew by 0.2 percent in the July-September period. However, it’s still expected to fall into recession as countries like Italy and Greece cut spending to reduce debt.
In other energy trading, heating oil was essentially flat at $3.1562 per gallon, and gasoline futures rose 3 cents to $2.5678 per gallon. Natural gas fell 2 cents to $3.582 per 1,000 cubic feet.

Bloomberg – Oil traded near a three-day high in New York as investors speculated that growth will recover in the U.S., spurring demand in the biggest crude consumer. Gasoline slid as Tropical Storm Irene headed toward Canada.

Futures fluctuated after climbing as much as 0.4 percent. Growth is safe in the long run and the central bank can still aid recovery, Federal Reserve Chairman Ben S. Bernanke said Aug. 26. Refineries along the East Coast were operating plants at or near normal levels after Irene weakened from a hurricane. London’s Brent dropped as Libyan rebels claimed full control of oil fields.

“Bernanke is suggesting that there are some good, some negative economic indicators and there is a chance of a double- dip, but overall he feels that the base has been laid for long- term growth,” said Jonathan Barratt, a managing director of Commodity Broking Services Pty in Sydney, who predicts crude in New York will average $100 a barrel this year. “You’ll find over the next three to six months there’ll be a marked improvement in terms of Libyan production.”

Crude for October delivery was at $85.29 a barrel, down 8 cents, in electronic trading on the New York Mercantile Exchange at 12:27 p.m. Sydney time. The contract gained 7 cents on Aug. 26 to $85.37, the highest since Aug. 23. Prices are 14 percent higher the past year.

Brent oil for October settlement slid 71 cents, or 0.6 percent, to $110.65 a barrel on the London-based ICE Futures Europe exchange. The European benchmark traded at a premium of $25.36 to U.S. futures, compared with a record $26.21 on Aug. 19.

Tropical Storm Irene

Irene was 20 miles (32 kilometers) south of St. Johnsbury, Vermont, with winds of 50 miles per hour and moving north- northeast at 26 miles per hour, the National Hurricane Center said in an update at 8 p.m. New York time yesterday. The storm killed at least 18 people from Puerto Rico to Connecticut, sent rivers to near-record heights and knocked out power to more than 4 million customers.

Hess Corp. said its Port Reading refinery in New Jersey returned to normal rates while NuStar Energy LP was aiming to start its Paulsboro, New Jersey, refinery today, the company said. PBF Energy Co. said it ran its New Jersey and Delaware plants “all through the storm.” ConocoPhillips’s 238,000 barrel-a-day Bayway plant in New Jersey remained shut and Sunoco Inc. ran its Philadelphia and Marcus Hook facilities at reduced rates.

Gasoline Prices

Gasoline for September delivery dropped as much as 1.9 percent today to $2.8800 a gallon in electronic trading on the New York Mercantile Exchange, extending a 1.1 percent drop on Aug. 26. Motor fuel prices climbed 4.7 percent from Aug. 22 to Aug. 25 on concern the cyclone would damage refineries in the U.S.’s biggest consuming area, home to about 65 million people.

Brent crude’s premium to New York’s West Texas Intermediate crude shrank the most in five weeks on Aug. 22 after rebels in Libya entered Tripoli, paving the way for the country’s oil production to resume.

Nouri Balroin, the head of the National Transitional Council’s production unit, said some lost output will start within three weeks, Al Jazeera reported Aug. 27. Oil experts will follow a three-stage plan to restore the flow of oil to 1.6 million barrels a day within 15 months, he said, according to the Qatar-based network.

The Libyan revolt, which began in February, has reduced the availability of light, sweet crude, or oil with low density and sulfur content. The country’s output fell to 100,000 barrels a day last month, a Bloomberg News survey showed. That’s less than 10 percent of the 1.6 million barrels the nation pumped in January, before the uprising.

–Editors: Paul Gordon, Alexander Kwiatkowski

To contact the reporter on this story: Ben Sharples in Melbourne at bsharples@bloomberg.net

To contact the editor responsible for this story: Alexander Kwiatkowski at akwiatkowsk2@bloomberg.net

Bloomberg – Natural-gas companies risk causing serious environmental damage from hydraulic fracturing unless they commit to the best engineering practices, a task force named by Energy Secretary Steven Chu concluded.

Regulations to protect public health will work best when drillers embrace techniques that avoid “undesirable consequences,” according to a draft report today by a subcommittee of the Secretary of Energy Advisory Board. The increased use of fracturing, or fracking, which forces water and chemicals into rock, raises the potential for a “serious problem,” the panel found.

The report offered recommendations for companies involved in fracking, such as Chesapeake Energy Inc. and Southwestern Energy Co., to follow, and guidelines for state regulators that oversee drilling.

“While many states and several federal agencies regulate aspects of these operations, the efficacy of the regulations is far from clear,” according to the report. “Effective action requires both strong regulation and a shale-gas industry in which all participating companies are committed to continuous improvement.”

The Environmental Working Group in Washington, which advocates for clean air and water, questioned the findings of a panel it said was dominated by the gas industry. The Independent Petroleum Association of America in Washington, which represents oil and gas companies, said the report marks “a useful starting point,” for discussions.

‘Disruptive Activities’

Communities “need to fully understand that there will be disruptive activities during drilling and industry needs to improve its response to local concerns,” Barry Russell, chief executive officer of the group, said in a statement.

In fracturing, millions of gallons of chemically treated water and sand are forced underground to break up rock and allow gas to flow. Advances in the technology have, in a few years, pushed gas from shale to almost 30 percent of U.S. production from a “negligible amount,” according to the report, which will be given to Chu on Aug. 18.

“What we’re recognizing in the report is the dramatic scale and speed which the growth of the industry has realized,” Kathleen McGinty, a subcommittee member who led President Bill Clinton’s Council on Environmental Quality, said in an interview. “Unless the imperatives that are sometimes articulated in regulation take deep root in every action out there, you will experience problems.”

Marcellus Shale

Lower drilling costs have lured companies to develop the Marcellus Shale, a formation from New York to West Virginia that includes regions not typically associated with gas production. The growth of fracking has raised questions “about whether both current and future production can be done in an environmentally sound fashion that meets the needs of public trust,” according to the report.

To resolve the concerns, the panel recommended creating an industry organization “dedicated to continuous improvement” of practices, such as measuring and reporting air pollution, minimizing water use and improving well casing and cementing. The subcommittee urged reducing emissions that contribute to ozone and called for a national database at a start-up cost of $20 million to link sources of public information on fracking.

The report underscores differences in public perception of the potential consequences of gas fracking. Industry advocates say the technique hasn’t caused a major incident for more than 60 years, though current techniques were introduced less than a decade ago. Opponents cite failures and accidents that result in tainting drinking water.

Fees, Taxes ‘Appropriate’

Fees and taxes are “an appropriate” way to fund better enforcement of environmental regulations, the report found.

Read more: http://www.sfgate.com/cgi-bin/article.cgi?f=/g/a/2011/08/10/bloomberg1376-P9OQL7XLVIHXHC8JA_NMLENF-20110811181618-7VQJBQUJ38GQAOOTEEAT7JR4UM.DTL#ixzz1UkEdBpHo

Barrons – The technicals are giving a green light once again to the temporarily depressed energy stock sector.

The past month has been tough for crude oil and its related stocks. But conditions appear to have changed for the better.

Although bruised, a popular exchange-traded fund tied to energy-related stocks found its footing and looks to beat the broad market once again.

Several technical factors came together over the past week to keep the bulls interested in the oil and gas sector. For the Select Sector SPDR-Energy (NYSE: XLE – News), the most important was the pickup in demand as prices reached their bottom.

In February, this ETF settled into a trading range between $73 and $80 a share. In May, even though oil futures plunged from $114 a barrel to $95 in a matter of days, oil stocks did not violate any technical levels. In other words, investors found their weakness to be a buying opportunity.

Even more interesting was the intraday reversal to the upside seen May 17. Early that day, prices dipped below the bottom of the trading range—normally a bad sign. However, by noon, buyers resumed control and sent prices steadily higher into the close. This change of mood just as the ETF was on the verge of breaking down was bullish. Indeed the market never looked back.

To be sure, the energy sector is not its old self from last year. For example, the “buy at any price” attitude of a momentum-driven market is gone. Technical indicators measuring such momentum are only in neutral territory.

There are also still a few hurdles to overcome. The most important is the top of the trading range still looming overhead. So far in 2011, this price level brought out the sellers so we have wait to see if demand stays strong the next time it is challenged.

One way to reduce risk when the market is still caught in a range is to look for stocks that appear ready to play catch up. One such candidate is equipment maker Cameron International (NYSE: CAM – News).

Cameron peaked in March at roughly 62, but slid steadily to a low of roughly 47 in May (see Chart 2). Although price action this month remained weak, internal technical changes were brewing.

For example, money started flowing back into the stock early in the month even as prices eased lower. More volume changed hands on days when prices rose than on days when they fell, suggesting growing demand.

Momentum indicators also improved. Again, as prices eased lower, such indicators as the relative strength index, a widely-watched measure of the pace of daily price changes, started to climb. This suggested that the sellers were exhausted and buyers were getting more interested.

Energy stocks may not be top market leaders at this time but they have found stability, if not renewed strength. With crude oil above $102 a barrel in Tuesday’s trading, energy stocks do seem to be back in the hunt.

Getting Technical Mailbag: Send your questions on technical analysis to us at online.editors@barrons.com. We’ll cover as many as we can, but please remember that we cannot give investment advice.

Michael Kahn, mutual fund co-manager, author of three books on technical analysis, former Chief Technical Analyst for BridgeNews and former director for the Market Technicians Association, also blogs at www.quicktakespro.com/blog.

E-mail us at online.editors@barrons.com

Bloomberg – Crude oil, gasoline, and heating oil fell at least 6.8 percent, with crude sinking below $100 as commodities plunged the most since 2009. The declines came after U.S. jobless claims climbed, adding to concern that growth will slow, affecting fuel demand. Ethanol also declined.

The dollar advanced against the euro, reducing the appeal of dollar-priced commodities, after European Central Bank President Jean-Claude Trichet said inflation risks will be watched “very closely,” signaling the ECB may wait until after June to raise rates.

Crude Oil

Crude oil for June delivery tumbled $9.44, or 8.6 percent, to $99.80 a barrel on the New York Mercantile Exchange. The price has dropped 12 percent this week, falling all four days. Crude gained 25 percent in the past year.

“We’ve got a bit of a bloodbath going on now,” said Peter Beutel, president of trading advisory company Cameron Hanover Inc. in New Canaan, Connecticut. “Once the ECB refused to raise rates, we saw the dollar take off and the drop in commodities accelerate.”

Gasoline

Gasoline for May delivery dropped 22.71 cents, or 6.8 percent, to $3.0954 a gallon on the Nymex, the lowest settlement in five weeks. Gasoline has increased 39 percent in a year.

Regular gasoline at the pump, averaged nationwide, increased 0.3 cent to $3.985 a gallon yesterday, AAA said on its website. That was the highest price since July 24, 2008. The price has gone up every day since March 21.

Heating Oil

Heating oil for May delivery fell 25.61 cents, or 8.1 percent, to $2.8869 a gallon on the Nymex. Heating oil has gained 32 percent in the past year.

Ethanol

Denatured ethanol for June delivery declined 6.2 cents, or 2.3 percent, to $2.58 a gallon on the Chicago Board of Trade. Ethanol has increased 62 percent in the past year.

Refineries and Transport

North Atlantic Refining is shutting a crude and isomax unit for work at the Come By Chance refinery in Newfoundland, Gloria Slade, a spokeswoman, said in an e-mail. The maintenance at the 115,000-barrel-a-day plant, owned by Korea National Oil Corp., is expected to last eight weeks, she said.

Total SA, Europe’s third-largest oil company, started a new 50,000-barrel-a-day coker project at its Port Arthur refinery in Texas that will increase the refinery’s ability to process heavy and sour crude oil, according to a company statement.

Holly Corp. (HOC) expects to return the west crude unit at its Tulsa, Oklahoma, refinery to service early next week, the company said in a quarterly earnings release.

Frontier Oil Corp.’s Cheyenne refinery in Wyoming will return to full rates this week after planned work during April, a company executive said during a conference call.

BP Plc plans to restart a second crude unit and associated downstream production units at its Texas City, Texas, refinery within a few days, according to a person familiar with the situation.

To contact the reporter on this story: Richard Stubbe in Houston at rstubbe1@bloomberg.net

To contact the editor responsible for this story: Dan Stets in New York at dstets@bloomberg.net

LOS ANGELES (AP) — Shares in energy companies involved in oil and natural gas services fell on Monday after an analyst said the sector is ripe for continuing consolidation.

Mergers and acquisition deals in the sector began to ramp up in 2010 and surged the first three months of the year, says Citigroup Global Markets analyst Robin Shoemaker.

Now, rising oil prices are setting the stage for more transactions, Shoemaker says in a research note on Monday, arguing that oil prices are the most reliable leading indicator of consolidation in the sector.

Nine transactions with a total value of $13 billion took place in the first quarter, including Ensco PLC’s proposed acquisition of Pride International for $8.7 billion.

That’s up from $7.3 billion in the fourth quarter and $3.4 billion in the third quarter of last year.

Shoemaker estimates that $8 billion to $13 billion in deals could transpire each quarter for the rest of this year. The analyst anticipates more stock deals than cash deals.

Among the energy services companies Shoemaker sees as the most likely takeover targets this year are Weatherford International Ltd., Dresser-Rand Group Inc., FMC Technologies Inc., Superior Energy Services Inc., Helmerich & Payne Inc. and Rowan Cos. Inc.

Without a strong turnaround this year, Weatherford could opt to put itself up for sale and would be an attractive takeover candidate for multiple potential buyers, Shoemaker wrote.

Shares in Weatherford and the other energy companies slipped Monday amid an overall market decline following Standard & Poor’s warning that it might lower its rating on U.S. government debt because of the mounting budget deficit.

– Weatherford fell 23 cents to $20.79;

– Dresser-Rand slipped 83 cents to $50.64;

– FMC Technologies fell 51 cents to $45.20;

– Superior Energy dipped 67 cents to $39.27;

– Helmerich & Payne tumbled 8 cents to $66.96; and

– Rowan Cos. fell $1.10, or 2.7 percent, to $39.63.

NEW YORK (AP) – Oil slipped more than 2 percent Monday after Standard & Poor’s lowered its long-term outlook for U.S. debt, raising concerns about the economy and expectations of cuts in government spending. Another move by China to slow its booming economy also helped push prices down.

Benchmark West Texas Intermediate crude fell $2.60, or 2.4 percent, to $107.06 per barrel in midday trading on the New York Mercantile Exchange. In London, Brent crude lost $2.23 at $121.22 per barrel on the ICE Futures exchange.

Gasoline pump prices climbed to a national average of $3.83 per gallon, according to AAA, Wright Express and Oil Price Information Service. A gallon of regular has increased 29.1 cents in the last month and 96.8 cents from a year ago. Pump prices are above $4 per gallon in California, New York, Illinois, Connecticut, Washington D.C., Hawaii and Alaska.

Economists are watching for signs that high fuel prices are taking a toll on the economy. Industry surveys suggest that drivers are cutting back on gasoline purchases. The combination of stagnant wages and rising food and energy costs has prompted some economists to lower their growth estimates for the economy in the first quarter by half.

A surprise decision by Standard & Poor’s Ratings Service to lower its long-term outlook for U.S. debt to “Negative” from “Stable” made a drop in energy consumption more likely, analysts said.

“If the U.S. doesn’t get its budget under control, we’ll need to raise interest rates,” said Phil Flynn, an energy analyst with PFGBest. Higher interest rates will make it tougher for consumers and businesses to raise money. That will slow down the economy and dampen energy demand, Flynn said.

“This is a real wake-up call for the government,” he said. “They need to get spending under control.”

Oil had been falling since early in the day, following China’s announcement over the weekend that its central bank would raise bank reserve requirements for the fourth time this year in an attempt to get inflation under control. The move is expected to hurt energy demand by making it harder for consumers and businesses in China to raise money. China is the world’s second largest oil consumer behind the U.S.

The price of oil was also undercut by comments from OPEC officials who said on Sunday that the market is oversupplied with crude and the recent surge in oil prices could drag down the global economic recovery. Saudi Arabia’s oil minister said his country cut oil production in March, but will probably raise it again this month.

Also, the dollar rose against the euro and other currencies on Monday. The euro weakened on worries the Greece would default on its debt. Since oil is traded in dollars, a stronger dollar makes it less attractive to buyers with foreign currencies and the price generally falls.

In other Nymex trading for May contracts, heating oil lost 5 cents at $3.1695 per gallon and gasoline futures gave up 5 cents at $3.2405 per gallon. Natural gas lost 10 cents at $4.099 per 1,000 cubic feet.

Chicago Tribune – With oil prices on the rise and consumers paying more than $4 a gallon for gasoline, attention has been fixated on when pump prices might reach $5. Few people have asked whether the oil market is overheated.

Until this week.

With high oil prices apparently nipping at the economy’s strength, investors suddenly soured on oil, commodities and stocks Tuesday.

Crude oil fell to about $106 a barrel — a steep decline compared with its price of almost $113 last week. Stocks dropped, too, as investors worried that oil is plunging because recent commodity inflation has taken too big a toll on paychecks and is interfering with the economy’s recovery.

The plunge in oil prices — about 6 percent since Friday — apparently was sparked by a Goldman Sachs commodities team, which warned investors Monday that it is becoming too dangerous to continue to stay invested in oil. The Goldman team, headed by Jeffrey Currie, noted concerns about speculation in oil and “nascent signs of oil demand destruction in the United States.”

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In other words, as predicted, rising oil prices seem to have reached the point where consumers and businesses are being forced to cut back purchases. That behavior could put a lid on oil prices, at least temporarily, and provide some relief to individuals suffering sticker shock at gasoline pumps. But other factors, such as threats to supplies in the Middle East and Africa, also can drive prices.

Regardless, investors need to be wary. Given the level of speculation in oil, prices could plunge sharply if speculators flee oil because they think the economy might cool and require less oil.

Some analysts have claimed throughout this year’s surge in oil prices that there is no fundamental reason for oil over $90 a barrel. Stephen Schork, of the Schork Group, for example, says that without the temporary shocks of Middle East and trading by oil speculators, the price of the commodity would be in the low $80s.

At the Dallas Federal Reserve Bank, economists have been examining whether oil prices are being driven by commercial demand or speculation, but no conclusion has been reached yet, said President Richard Fisher.

Regardless, he remains concerned that high commodity prices, along with increasing wage inflation in areas such as Germany, may pose a risk to the global economy.

Both the International Monetary Fund and International Energy Agency noted this week that the economy is starting to feel the pressure of high oil and commodity prices. While neither predicted a return to recession, they said commodity prices could keep growth more constrained than expected.

In a report on the world economy, the IMF said that commodity prices have increased more than expected and noted “risks to the recovery from additional disruptions to oil supply.” The most vulnerable economies are in developing regions of the world, where people spend a substantial portion of their income on food and fuel.

But even wealthy Americans are starting to feel the impact of oil, according to an IPSOS Mendelsohn survey. About 53 percent of people earning more than $100,000 a year said they have been impacted by higher oil prices.

“You notice it when you spend $80 filling up your car,” said IPSOS Mendelsohn president Bob Shulman. “Will it change spending? … I don’t know. But if you earn $62,000 and drive 35 miles to a job each day, it sure will matter.”

Goldman’s commodities team said the firm is no longer going to hold oil after a 25 percent gain, and the analysts decided it was too risky to wait for the 28 percent gain it had originally targeted. In addition, the team said that as oil costs have put pressure on budgets, consumption of metals is likely to decline.

Oil isn’t the only threat to commodities. “Copper and platinum will face near-term headwinds” related to Japan’s earthquake, said Currie’s team. The report noted that the automobile industry is being affected by disruptions in supplies from Japan, and platinum has “large exposure” to reductions in auto manufacturing. Further, “copper remains vulnerable” to slowing demand from China.

China, faced with an overheating economy, has been intentionally slowing its economy in recent months. Analysts will be watching earnings reports carefully over the next few weeks to see if slowing economies or high raw material costs are becoming a drag on corporate profits. Tuesday’s unease was fed, in part, by an earnings report by Alcoa that fell short of analyst expectations Monday, despite a 22 percent increase in sales.

Goldman commodities analysts said the team is viewing the current retreat from commodities as temporary.

“The supply-side story remains intact, and we would look for new entry points” to purchase commodities again, the team said.

Further, Goldman stock strategist David Kostin continues to expect the Standard & Poor’s 500 to rise about 12 percent, to 1,500, over the next 12 months.

NEW YORK (Reuters) – Brent crude jumped to a 2-1/2 year peak above $122 a barrel on Tuesday, gaining for a fourth straight day as conflict and unrest in Africa and the Middle East more than offset China’s latest interest rate hike.

U.S. crude futures slipped in choppy trading ahead of weekly inventory reports, hemmed in by the prospect that the reports, starting with industry data due late in the day, will show crude stocks rose again last week and more supply arrived at the Cushing, Oklahoma, delivery hub.

Oil and copper slumped early on the threat to demand from another Chinese interest rate hike, the fourth since October. China’s move, designed to rein in inflation, also pressured Wall Street, which rose for most of the session before easing to near flat in late choppy trading.

Brent crude’s premium to U.S. benchmark West Texas Intermediate crude increased to more than $14 intraday for the first time since March 3 after it had reached a record $17.12 a barrel on March 1.

Brent crude for May rose $1.16 to settle at $122.22 a barrel after reaching $122.89, the highest front-month price since August 2008.

U.S. May crude fell 13 cents to settle at $108.34, unable to reach Monday’s $108.78 intraday peak, which was the highest since September 2008.

“WTI is sputtering a bit ahead of inventory data. But Brent continues to march higher on Middle East/Africa supply outages and concerns,” said Tom Bentz, a broker at BNP Paribas Commodities Futures Inc in New York.

Trading volumes remained well below 30-day and 250-day averages, and total Brent crude volumes were above those for U.S. crude in post-settlement trading on Tuesday.

“This rally is suspect because of the low volumes. There is an old saying that one should avoid being long a thin rally,” said Michael Fitzpatrick, editor of the Energy Overview industry newsletter of the Kilduff Group in New York.

Trading volumes for U.S. crude posted their lowest weekly totals for the year in the past two weeks.

LIBYA, MIDDLE EAST, SUPPLY CONCERNS

The back-and-forth fight for control of the Libyan oil town of Brega reinforced the prospect that a stalemate will prolong the loss of the country’s 1.3 million barrels per day of exports.

“The geopolitical problems are closer to Europe and Nigeria’s election delay and Forties cargoes delays are all hitting sweet crude supply,” said Andrew Lebow, broker at MF Global in New York.

Brent prices were lifted on Monday by news of delays for several April cargoes of Forties crude — which typically sets the level of dated Brent benchmark — due to a brief drop in North Sea Buzzard oilfield production last week.

Worry that Chinese demand would be limited by efforts at curbing inflation could not offset the Libyan conflict and unrest in Saudi Arabia’s neighbor Yemen as well as anger in Nigeria over delayed elections.

Ahead of weekly U.S. oil inventory reports from industry and government, an expanded analyst survey on Tuesday expected crude stocks to have risen 1.7 million barrels last week.

Gasoline stocks were expected to be lower by 1.9 million barrels and distillates were seen posting a small 200,000-barrel decline.

The inventory report from the American Petroleum Institute, an industry group, is due at 4:30 p.m. EDT Tuesday, followed by the report from the U.S. Energy Information Administration Wednesday morning.

(Additional reporting by Gene Ramos in New York, Jessica Donati in London and Seng Li Peng and Simon Webb in Singapore; Editing by Alden Bentley, David Gregorio and Jeffrey Benkoe)