Oil prices bounce back up

Crude oil prices partially recovered early Friday from a drop of more than $2 a barrel sparked by expectations of lower jet fuel demand and weaker consumer confidence due to the thwarted airplane attacks in Britain.

Light, sweet crude for September delivery was up 24 cents at $74.24 in midmorning Asian electronic trading on the New York Mercantile Exchange.

Thursday’s price drop of more than 3 percent erased all of this week’s gains, and more. It was the lowest settlement price since July 28.

On Thursday, British authorities said they had stopped a terrorist plot to blow up several aircraft in flight between Britain and the United States.

An oil rig in China's Bohai Sea in a file photo. (China Newsphoto/Reuters)

An oil rig in China’s Bohai Sea in a file photo. (China Newsphoto/Reuters)

European carriers canceled flights to Britain, where airports experienced massive delays. There were delays in the United States, too, amid heightened security.

Tom Bentz, an analyst at BNP Paribas Commodity Futures in New York, said Thursday that the news “revives fears, and causes people to cut travel plans, which has a contracting effect on petroleum demand.”

In other Nymex trading early Friday, gasoline futures rose 3.06 cents to $2.0195 a gallon, after closing Thursday at their lowest price since finishing at $1.9766 on April 7. Heating oil futures rose 1.10 cent to $2.0360 a gallon. Natural gas futures fell 4.9 cents to $7.480 per 1,000 cubic feet.

Thursday’s price drop was also attributed to Shell announcing it was bringing back 180,000 barrels of daily oil production in Nigeria. Shell had blocked a 180,000 barrel-a-day pipeline in late July after an unexplained leak.

Southern Nigeria, where most of the nation’s crude is pumped, has seen rising violence against the petroleum industry. Kidnappings and attacks have forced a cut of about 20 percent of Nigeria’s usual 2.5 million barrel daily production.

Goldman Sachs, meanwhile, said it would end its participation in the New York Harbor unleaded gasoline contract, as expected, but wouldn’t roll its money into another contract.

Gasoline prices fell 9 percent to a four-month low, as big funds bailed out of the contract.

Prices continued to be affected by supply disruptions in Nigeria due to civil unrest, BP PLC’s pipeline in Alaska shut down because of corrosion, the standoff between the United Nations and Iran over the nuclear program of OPEC’s No. 2 oil producer, and fighting in the Middle East between Israel and Hezbollah.