NEW YORK - Gas prices rose overnight for the first time in more than a month as the closure of a Kansas refinery sent prices in the center of the country sharply higher.
The average national price of a gallon of gas inched up 0.3 cent overnight to $2.952, according to AAA and the Oil Price Information Service. Retail prices, which typically lag futures, had fallen steadily since their late May peak of $3.227 a gallon.
Analysts have long argued that the slide was due to end and that prices were likely to start following futures prices higher. Futures have rallied in recent weeks on concerns about domestic refining capacity.
It's unclear how much prices will rise. Tom Kloza, publisher and chief oil analyst at the Oil Price Information Service, said the overnight increase is almost all attributable to price jumps in the Plains and front-range Rockies states. Supplies there have been cut by the flooding and closure of a refinery in Coffeyville, Kan., that can produce 2.1 million gallons of gasoline per day.
"They just lost about one-seventh of their gasoline supply for the summer," Kloza said.
However, if retail gas prices are destined to follow futures higher, then they're likely to keep rising. Oil and gasoline futures rose Friday on continuing concerns about violence and kidnappings in Nigeria and a sense that domestic refiners are struggling to produce enough gas.
Light, sweet crude for August delivery gained 85 cents to $72.66 a barrel on the New York Mercantile Exchange. August gasoline rose 1.45 cents to $2.2988 on the Nymex.
August Brent crude rose 75 cents to $75.50 a barrel on the ICE Futures exchange in London.
Nymex heating oil futures rose 1.03 cents to $2.0976 a gallon, while natural gas prices fell 12.3 cents to $6.495 per 1,000 cubic feet. The government reported that natural gas inventories rose by 78 billion cubic feet last week, in line with analyst expectations.
In Nigeria, kidnappers on Friday threatened to kill a 3-year-old British girl abducted on Thursday if their demands aren't met. On Wednesday, gunmen attacked a Royal Dutch Shell PLC oil rig in Nigeria's southern oil heartland and seized five foreign workers.
Traders had hoped the situation in Africa's largest oil-producing nation would stabilize following the May election of President Umaru Yar'Adua.
"A new spiral of violence could not only further delay an elusive recovery in Nigerian crude production, but also severely undermine the stability of the fragile, budding Yar'Adua administration," said Antoine Halff, head of energy research at Fimat USA LLC.
The Nigerian news drove Brent crude futures higher, and the rest of the energy complex followed, analysts said.
"The leadership has been coming from overseas," said Kloza.
Traders are also focusing on what they see as bad news in Thursday's inventory report from the Energy Department's Energy Information Administration. The report showed surprise increases in both oil and gasoline inventories last week. But it also showed a surprisingly small increase in refinery utilization.
On closer inspection, traders noticed that crude inventories increased mostly in the states along the Gulf of Mexico, but fell in Cushing, Okla., the Nymex delivery point. That has led to a sense that demand for crude will grow, at least in Cushing.
"In other words, despite being at a nine-year high, crude oil stocks are falling where it most counts," wrote Stephen Schork, an energy trader, in a research note.
Traders are also concerned about refinery utilization levels, which rose to 90 percent but are still far below the 94 percent to 95 percent most think is necessary to meet peak summer driving demand.
Analysts have worried for months that the refining industry isn't producing enough gas to meet demand. Those concerns have been exacerbated by an unusually high number of refinery outages this year.
Jan Stuart, an analyst at UBS Securities LLC, says the outage situation isn't likely to improve. A new set of refinery inspections planned by the Occupational Safety and Health Administration may make matters worse, Stuart said.
"There is no telling how many more 'unplanned' outages might result from these inspections," Stuart wrote in a research note.
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Associated Press Writers Pablo Gorondi in Budapest and Gillian Wong in Singapore contributed to this report.
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