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ON THE POLITICAL FRONT, we pay heed to the situation in Nigeria far more than perhaps anyone else on Wall Street does for the very simple reason that Nigeria has become a more and more and more important supplier of crude oil to the US. As of October of last year (the last month which the IEA has listed imports from abroad on its website), Nigeria ranked as the 4th largest exporter of crude to the US, just a few thousand barrels/day behind S. Arabia [Ed. Note: Just for the record, note that as of the end of October, Canada had sent the US an average of 1.922 million bpd. Mexico had sent us 1.114 million bpd. The Saudis 1.014 million and the Nigerians 1.000 million. Saudi exports to the US, however, have fallen 33% in ’09 compared to ’08, while imports from Nigeria had fallen “only” 22% as imports from almost every country fell as the economy weakened. Only imports from Colombia rose, from a very small 0.163 million bpd to -.265 million.]. MEND has said that it has ended its cease fire with the central government in Abuja, and on the day it announced the end to that cease fire Shell reported sabotage serious enough at three of its pipelines to shutter them in. More such violence shall follow.

The problem that Nigeria suffers… beyond endemic, material, corruption… is that the President, Mr. Yar’Adua, a Muslim from the northern Muslim states where sharia is now the law, is in hospital in Saudi Arabia and seems incapable of returning to Nigeria. The Congress is demanding that Mr. Yar’Adua either
stand down entirely or stand down from his powers as President and hand the reins of power to Vice President Goodluck Jonathan. The President’s Muslim supporters obviously hope to keep him in power until his term in office expires, for they fear the ascendency of the Vice President… a Christian from the Niger River Delta… which would undermine Muslim rule federally. Vice President Jonathan has risen swiftly from a non-power to a power centre. Only a very few years ago he was a powerless Vice Governor of Bayelsa in the nation’s south. Now he finds himself on the cusp of becoming Nigeria’s next President.

- Dennis Gartman/ The Gartman Letter 02 /02 / 2010

Finally, MEND… the Movement for the Emancipation of the Niger River Delta… has chosen to stand by its announced end to the cease fire it had previously announced with the government in Abuja. MEND has previously said that unless real movement toward accommodation on the part of the Nigeria federal government with demands for greater autonomy and for great retention of the oil revenues earned there. Now, however, there is an additional “problem:” the fact that the President remains in S. Arabia in hospital while the Congress is demanding more and more that he turn power over to Vice President Goodwill Jonathan. As our readers will remember, Vice President Jonathon is a non-Muslim from Nigeria’s Niger River Delta. It is quite possible that MEND will begin more actively attacking oil facilities in the Delta, using what force they can muster… and it can be material… to push for Jonathan’s ascendency to the Presidency. Given that President Yar’Adua is Muslim from Nigeria’s Muslim north, they will not take well to any efforts to unseat the President… especially for a Christian from the South. For the first time in a while, confusion shall being to reign in Nigeria, and given Nigeria’s position as a material exporter of high quality crude to the US this is all the more important. Already MEND is at work, for Shell has closed three of its “flow stations” out of the Niger River Delta after pipelines there were “sabotaged” over the weekend. More almost certainly shall follow.

- Dennis Gartman/ The Gartman Letter 02 /01 / 2010

- For more on interesting comments, you can subscribe to The Gartman Letter by contacting Dennis Garthman: Phone-Fax:or email: dennis@thegartmanletter

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