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Oil prices higher in Asian trade on Nigeria worries
AFP
SINGAPORE
Petroleumworld.com 07 28 06
Oil prices rose in Asian trade Friday on concerns over Nigerian supply disruptions and against a backdrop of rising Middle East tensions, dealers said.
At 11:29 am (0329 GMT) New York's main contract, light sweet crude for delivery in September, was up eight cents at 74.62 dollars per barrel from 74.54 dollars in late US trades Thursday.
Brent North Sea crude for September delivery was up 15 cents at 75.16 dollars.
Tobin Gorey, commodities strategist at the Commonwealth Bank of Australia in Sydney, said the market was still feeling the ramifications after Shell declared 'force majeure' on crude deliveries from Nigeria's Bonny oilfield for July and August. The move means contracts might not be honoured during those two months.
The Anglo-Dutch giant declared force majeure after a leak in an oil pipeline in southern Nigeria cut output by 180,000 barrels per day.
Separate disruptions blamed on unrest in the Niger Delta brought Nigeria's total production loss to 675,000 barrels per day, or 26 percent of the country's normal daily output, an industry source told AFP on Thursday.
"It's not a short-term problem," Gorey said.
"The market is concerned about what's happening in Nigeria," agreed Phil Flynn at Alaron Trading.
Gorey said tensions over Iran were also "a big part" of why oil prices have remained above 70 dollars.
Six major powers held a meeting on Iran's nuclear program on Thursday and came closer to agreeing on a resolution to put to the United Nations Security Council, diplomats said.
The council's permanent members -- Britain, China, France, Russia and United States -- plus Germany agreed to send the latest draft resolutions back to their governments.
They were to decide early Friday whether to distribute the text to UN Security Council members. One diplomat said that if there were agreement, a vote on the resolution could be held next week.
The draft aims to force Iran to cease uranium enrichment which can be used to make nuclear weapons. Iran says its program is for peaceful purposes.
Iran is also the main backer of the militant Islamic group Hezbollah which is fighting with Israel in Lebanon.
Concerns that the violence could spread to Iran and other major crude-producing nations in the Middle East saw oil prices soar to all-time highs above 78 dollars earlier this month.
AFP 28 0345 GMT 07 06
Copyright ©2006 AFP. All Rights Reserved.
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