Crude spikes to $100 intraday on supply concerns, Nigeria violence (MarketWatch) (03-01-2008)

SAN FRANCISCO (MarketWatch) - Crude-oil futures spiked to $100 during trading on Wednesday and closed at the highest level on expectations that U.S. crude inventories fell for a seventh consecutive week and on concerns that violence in Nigeria may cut output from Africa's biggest oil producer.

Crude for February delivery rebounded by $3.64, or 3.8%, to close just shy of the $100, at $99.62 a barrel on the New York Mercantile Exchange, the highest closing price of a front month contract. Futures surged $4.02 and hit $100 a barrel in early afternoon trading. Other energy futures also ended higher.

The U.S. Energy Information Administration and the American Petroleum Institute will be issuing separate inventories reports at 10:30 a.m. Eastern on Thursday, and analysts believe that stockpiles will probably show they were lower by 1.8 million barrels in the week ended Dec. 28.

As for the violence in Nigeria, at least 13 people have been killed in attacks by gunmen on two police stations and a hotel Port Harcourt, as reported by the the BBC on Tuesday. Nigeria is the world's 12th-largest oil producer and ranks as the fifth-largest exporter of oil to the U.S.

On Monday, the crude contract ended last year's trading almost flat at $95.98 a barrel. Crude soared nearly 60% for 2007.

Analysts polled by Dow Jones Newswires also predicted that U.S. gasoline inventories are expected to have risen by 1.6 million barrels last week, while distillate supplies, which include diesel and heating oil, have dropped by 300,000 barrels.

EIA reported last Thursday that the nation's crude inventories fell to 293.6 million barrels in the week ended Dec. 21, the lowest level seen in nearly three years. U.S. crude inventories had fallen more than 20 million barrels since the week ended Nov. 9.

EIA also reported total U.S. commercial petroleum stocks -- including crude oil, motor gasoline and heating oil -- dropped for a sixth week to 981.9 million barrels in the week ending Dec. 21. The current commercial stocks can support about one and a half months of U.S. petroleum consumption, "a quite low level," said James Williams, an economist at WTRG Economics, an energy research firm.

The U.S. is the world's largest crude-oil consumer, accounting for nearly a quarter of the world's production. U.S.'s Strategic Petroleum Reserves were at 695.5 million barrels, or more than one month of U.S. consumption.

Elsewhere on the commodity markets, gold futures rose $22 to close at $860 an ounce, as the rallying crude prices combined with U.S. dollar weakness and rising global political tensions to boost demand for the precious metal.

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