Crude oil prices rise in afternoon trade

Crude drops despite inventories, storm, OPECAfter being down for most of the day, crude oil prices rose at the close of the session on news of supply disruptions in Iraq and Kuwait and on new problems in Nigeria.

Exports were disrupted from Iraq and Kuwait due to inclement weather, while white-collar oil-industry workers in Nigeria have threatened to strike against a unit of Chevron Corporation (NYSE: CVX) and a major militant group there said it would not participate in a peace summit scheduled for next month.

Earlier in the day, the Energy Information Administration issued its weekly report on US inventories, which showed that crude oil stockpiles were down 1.2 million barrels to 301 million barrels, less of a decline than was expected.

Gasoline stockpiles were also down 1.2 million barrels against an expected rise, while distillates added 2.6 million barrels to storage, more of a gain that had been anticipated.

In other related news, US President George W. Bush asked Congress to permit more domestic drilling for oil to lessen dependence on foreign oil and bring down prices, but Democrats in Congress said that there was no reason to believe that expanded drilling would help reduce prices.

Near the close of floor trade on the New York Mercantile Exchange, July contracts for West Texas Intermediate crude had added $2.68 to $136.69 per barrel while Brent crude had gained $1.91 to $135.63 per barrel on the ICE Futures Europe in London.

Nymex July gasoline was up 2 cents to $2.44 per gallon while August heating oil was down 5 cents to $3.80 per gallon and August natural gas also gained 2 cents to $13.06 per million British thermal units.

The price of regular unleaded gasoline at the pump in the United States dropped 0.3 cent overnight to a national average of $4.075 per gallon.

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