Nigeria security concerns push oil price up to US$60

SINGAPORE – Oil prices rose sharply in Asian trade yesterday on concerns that separatist tensions in Nigeria, a major exporter, will force further a reduction in supplies, dealers said.

At 1:19 am (0319 GMT), New York’s main contract, light sweet crude for delivery in March, was up US$1,07 to US$60,95 (N$368,14) a barrel from its close of US$59,88 Friday in the United States. Trading on the New York Mercantile Exchange (Nymex) was closed Monday for the President’s Day Holiday.In London trade, the price of Brent North Sea crude for April delivery jumped US$1,79 to US$61,54, off a peak of US$61,63.”It’s a delayed reaction to what happened over the weekend.Nymex was closed yesterday and so it couldn’t react,” said Daruis Kowalyczk, a Hong-Kong based senior investment strategist with CFC Seymour.”So when Nymex opened, the market had to adjust this morning to a lower global supply of crude and the higher geopolitical risk premium,” he said.Separatist guerrillas in Africa’s biggest crude producer taunted the army Monday with claims of further attacks after a weekend of violence forced energy giant Royal Dutch Shell to cut oil exports by a fifth.The insurgents said the military had abandoned one of its posts in waterways west of the oil city of Warri, allowing the militants to dynamite a floating barracks block and another of Shell’s crude oil pipelines.An army spokesman denied the attack took place.Officials of the oil giant said they had evacuated all oil plants in the immediate area, bringing Nigeria’s losses to around half a million barrels per day.Following the weekend assault, Shell said it was suspending exports from the Forcados terminal, which produces 380 000 barrels per day and was evacuating an offshore field supplying 115 000 barrels per day.The worsening situation “has the potential of lifting oil prices back towards the high US$60″ range, Sucden analysts said.The global oil market currently has spare capacity of roughly 1,5 million barrels per day, according to market analysts.That would be insufficient to compensate for a loss of total production in Nigeria, which stood at 2,4 million bpd in January.The market was also keeping a close watch over events in Moscow, where Iranian and Russian officials on Monday ended talks without agreement on a Russian plan to resolve Iran’s nuclear standoff.Russia has proposed supplying fuel for Iran’s nuclear energy programme, which would remove the need for Tehran to enrich uranium on its own territory and allay Western concerns that Iran is trying to develop nuclear weapons.Iran exports 2,6 million barrels per day and is the second largest producer in the Organisation of Petroleum Exporting Countries.- Nampa-AFPTrading on the New York Mercantile Exchange (Nymex) was closed Monday for the President’s Day Holiday.In London trade, the price of Brent North Sea crude for April delivery jumped US$1,79 to US$61,54, off a peak of US$61,63.”It’s a delayed reaction to what happened over the weekend.Nymex was closed yesterday and so it couldn’t react,” said Daruis Kowalyczk, a Hong-Kong based senior investment strategist with CFC Seymour.”So when Nymex opened, the market had to adjust this morning to a lower global supply of crude and the higher geopolitical risk premium,” he said.Separatist guerrillas in Africa’s biggest crude producer taunted the army Monday with claims of further attacks after a weekend of violence forced energy giant Royal Dutch Shell to cut oil exports by a fifth.The insurgents said the military had abandoned one of its posts in waterways west of the oil city of Warri, allowing the militants to dynamite a floating barracks block and another of Shell’s crude oil pipelines.An army spokesman denied the attack took place.Officials of the oil giant said they had evacuated all oil plants in the immediate area, bringing Nigeria’s losses to around half a million barrels per day.Following the weekend assault, Shell said it was suspending exports from the Forcados terminal, which produces 380 000 barrels per day and was evacuating an offshore field supplying 115 000 barrels per day.The worsening situation “has the potential of lifting oil prices back towards the high US$60” range, Sucden analysts said.The global oil market currently has spare capacity of roughly 1,5 million barrels per day, according to market analysts.That would be insufficient to compensate for a loss of total production in Nigeria, which stood at 2,4 million bpd in January.The market was also keeping a close watch over events in Moscow, where Iranian and Russian officials on Monday ended talks without agreement on a Russian plan to resolve Iran’s nuclear standoff.Russia has proposed supplying fuel for Iran’s nuclear energy programme, which would remove the need for Tehran to enrich uranium on its own territory and allay Western concerns that Iran is trying to develop nuclear weapons.Iran exports 2,6 million barrels per day and is the second largest producer in the Organisation of Petroleum Exporting Countries.- Nampa-AFP