Oil over $44 after Russian fire, awaits U.S. data
U.S. crude oil futures jumped more than $2 to above $43 per barrel on Wednesday, after an oil leak and fire on a Russian pipeline disrupted exports.
Prices were also supported by further supply disruption in Nigeria, as well as more positive economic news from China.
U.S. oil futures for April delivery rose to $44.23, up $2.58 by 9:55 a.m. EST.
London Brent crude rose $1.93 to $45.63 a barrel.
Supply disruptions in Nigeria and a leaking pipeline in Russia helped the (market) trend, said Christopher Bellew of Bache Commodities.
An oil leak and a fire on a pipeline in central Russia have halted flows to the Black Sea port of Novorossiisk and exports were unlikely to resume in the next three-to-four days, a port official said.
Russia, the world's second-largest oil exporter after Saudi Arabia, sends more than a quarter of its oil exports via the Black Sea ports of Novorossiisk, Odessa and Yuzhny.
Production has been disrupted in Nigeria by suspected sabotage. A senior official at the state-run NNPC said up to 70,000 barrels per day (bpd) had been shut in following pipeline explosions.
Oil supplies have already started to tighten, in part following action by the Organization of the Petroleum Exporting Countries to reduce supply.
U.S. crude inventory data from inventory body the American Petroleum Institute on Tuesday showed U.S. crude stocks had fallen by 463,000 barrels last week following lower imports and higher demand from refiners.
The next set of weekly figures from the U.S. government Energy Information Administration, to be released on Wednesday, were expected to show a rise in crude stockpiles, but falls in gasoline and distillate inventories, according to an analyst survey.
Oil prices have traded in a narrow band around $40 since mid-December, pulled down by falling demand but drawing some support from expectations OPEC might cut production again when it meets on March 15.
The 12-member producer group has announced plans to lower oil output by 4.2 million bpd from production levels in September and a Reuters survey found OPEC members have already met at least 81 percent of their promised cuts.
OPEC sources said on Wednesday that Angola, which is currently president of the group, did not advocate a further reduction at the next meeting on March 15 in Vienna, although other OPEC members have yet to make a decision.
Venezuela, Algeria and Libya have raised the possibility of a further reduction, while Iran has said OPEC needed to define a mechanism to support prices, without specifying what form it would take.
Data from China gave room for cautious economic optimism, with implications for higher oil demand, as the main gauge of China's manufacturing sector, its purchasing managers' index (PMI), rose in February.
China's PMI index rose for the third month in a row last month as factories restocked in anticipation of an early revival in the economy.
The data helped to revive sentiment on equity markets on Wednesday after the United States' S&P ended below 700 for the first time since October 1996. <.N>
(Additional reporting by Jennifer Tan in Singapore; editing by James Jukwey)
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