Oil
prices up as market tracks Nigeria unrest
AFP
NEW YORK
Petroleumworld.com
02 22 06
Oil prices soared in New York on Tuesday, mirroring sharp gains
made in London a day earlier owing to supply disruptions in Nigeria,
Africa's biggest producer of crude.
New York's main contract, light sweet crude for delivery in March,
surged 1.22 dollars to 61.10 dollars per barrel in pit trading.
In London, the price of Brent North Sea crude for April delivery
went up six cents to close at 61.60 dollars per barrel.
"Oil markets sentiment remains dominated by the escalation
of attacks in Nigeria," Barclays Capital analyst Kevin Norrish
said.
In London on Monday, crude futures had risen almost 3.0 percent
as weekend unrest in Nigeria slashed output in the country.
The New York oil market had been closed on Monday for the Presidents'
Day public holiday in the United States.
New York "crude futures were higher (Tuesday), catching up
from yesterday when the US markets were closed", analysts
at the Sucden brokerage firm said in London.
On Tuesday, Nigerian officials sought to negotiate the release
of nine foreign workers being held as "human shields"
by rebel fighters.
The nine oilmen -- three Americans, a Briton, two Egyptians, two
Thais and a Filipino -- were seized on Saturday by separatist
guerrillas during an attack on the energy giant Shell's Forcados
oil terminal.
Damage to the terminal and surrounding pipelines, combined with
fears for the safety of other workers, has forced the firm to
cut production by 455,000 barrels of oil per day, equivalent to
almost 20 percent of Nigeria's total output.
"The oil market once again has been pulled out of potential
obscurity by another host of geo-political events," said
Phil Flynn, an analyst with Alaron.
The ongoing violence in Nigeria "has brought in a surge of
buying over the weekend promising a strong open and possibly another
rocking week in energy," he said.
Nigeria, the world's sixth-biggest exporter of oil, produces light,
sweet crude, which is easier and cheaper to refine than heavy,
sour crude, produced by oil kingpin Saudi Arabia.
The global oil market currently has spare capacity of roughly
1.5 million barrels per day, according to market analysts.
That would not compensate for a loss of total production in Nigeria,
which stood at 2.4 million barrels per day in January.
"Nearly half of Nigeria's oil exports go to the United States,"
said Mike Fitzpatrick, an analyst with Fimat, noting that Nigeria's
oil is particularly sought by US refiners because it is easier
to refine.
The market was also keeping an eye on Iran, whose nuclear standoff
could lead to a disruption of the country's oil exports according
to analysts.
And traders followed a continuing war of words between US officials
and Venezuelan President Hugo Chavez, who has threatened to cut
off oil exports to the United States if Washington goes too far
in its campaign against him.
Russia has said it hopes to persuade Tehran to create a joint
enterprise that will enrich uranium for Iran on Russian territory,
enabling Iran to restore a moratorium on enriching uranium at
home.
Iran exports 2.6 million bpd and is the second largest producer
in the Organization of Petroleum Exporting Countries.
Petroleumworld
02 22 06
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