Oil jumps above $70 on Nigerian platform attack

Oil prices jumped back above the $70 a barrel threshold Monday as Nigerian militants damaged and partly shut down an offshore oil platform belonging to Royal Dutch Shell PLC.

Benchmark crude for August delivery gained $1.74 at $70.90 a barrel on the New York Mercantile Exchange. On Friday, it fell $1.07 to settle at $69.16.

Shell spokesman Precious Okolobo confirmed the attack and partial shutdown. Past militant attacks on infrastructure in Nigeria’s restive southern oil region have trimmed output in Africa’s biggest crude producer by about 25 percent.

The jump in oil prices came despite a report from the International Energy Agency predicting a slower rebound in global energy demand.

The Paris-based IEA said demand is likely to grow by an average of 0.6 percent annually over the 2008-2014 period. It would reach 89 million barrels a day by 2014 assuming the International Monetary Fund’s current forecast of a return to 5 percent annual economic growth by 2012, the agency said.

Jim Ritterbusch, president of energy consultancy Ritterbusch and Associates, said there seemed to be little else driving oil prices, as both the dollar and stocks were relatively flat.

Ritterbusch said a barrel of oil is sitting about where it started the month, and he expects the trend of sideways trading will likely continue. Volume is typically low in the days leading up to a holiday weekend.

“Right now we’re showing some gains, but by the end of the day we could be right back down again,” he said.

Meanwhile, retail gasoline prices, which fell for the first time in nearly two months a week ago, continued their pullback as the average price of a gallon of regular unleaded gas fell overnight by four-tenths of a cent to $2.639, according to AAA, Wright Express and Oil Price Information Service.

That’s still about 15 cents a gallon higher than last month, but $1.44 cheaper than this time last summer.

Oil prices, which yo-yoed near $70 a barrel last week, have doubled since March.

Investors will watch economic data this week, including the Labor Department’s June unemployment report. The jobless rate hit a 25-year high of 9.4 percent in May, jumping from 8.9 percent in April.

The latest indicators of consumer confidence and manufacturing activity will also be released.

In other Nymex trading, gasoline for July delivery gained 6.58 cents at $1.9399 a gallon and heating oil rose 4.91 cents to $1.7794 a gallon. Natural gas for July delivery fell 10.4 cents to $4.001 per 1,000 cubic feet. The IEA report forecast natural gas demand this year will drop for the first time in 50 years.

In London, Brent prices rose $1.55 to $70.47 a barrel on the ICE Futures exchange.

Copyright 2009 The Associated Press.