Oil near US$67 as Nigeria tensions rise

LONDON – Oil neared US$67 (N$402) yesterday as Nigerian militants set their sights on Total, Agip and Chevron operations in a drive to halt oil flows from the world’s eighth biggest crude exporter.

Previously the rebel Movement for the Emancipation of the Niger Delta had focused on Royal Dutch Shell, forcing Nigeria’s biggest foreign operator to scale back output by 226 000 barrels per day, roughly 10 per cent of national output. In a statement e-mailed to Reuters yesterday, the group said it had widened its attacks to Agip and Total facilities and would also target Chevron.Agip and Total issued denials.US crude oil climbed as far as US$66,91 a barrel, the highest since September 30 last year, and was up 52 cents at US$66,83 at 1020 GMT.London Brent crude was up 45 cents at US$65,35.”We have decided not to limit our attacks to Shell as our ultimate aim is to prevent Nigeria from exporting oil,” the rebels said.”Pipelines, loading points, export tankers, tank farms, refined petroleum depots, landing strips and residences of employees of these companies can expect to be attacked.We know where they live, shop and where the children go to school.”Most of Nigeria’s oil is produced in the Niger Delta where an estimated 20 million people live in poverty alongside a multibillion-dollar industry.For the world’s big energy consumers, violence in Nigeria has come at a bad time.Iran’s dispute with the West over its nuclear programme has raised questions about the security of supplies from Opec’s second biggest producer.”Recent disruptions of crude oil production in Nigeria and tensions between the West and Iran over its nuclear programme…have contributed to concerns about Opec’s ability to supply the market,” analysts at Merrill Lynch said.Crude prices have risen more than nine percent since the start of the year.The International Energy Agency sounded a warning on Tuesday over the world’s limited ability to pump extra oil.Almost all the spare capacity of 1,5 million barrels per day is in Opec countries, a level the IEA described as “below comfort levels”.Blanket sanctions such as an oil embargo are thought highly unlikely, but Iran has not ruled out using its 2,4 million bpd of oil exports for leverage.”The Strait of Hormuz, which borders Iran, is the preferred route for around 20 per cent of global oil output.The prospect of this area becoming a military risk adds to the problem,” said Tobin Gorey of the Commonwealth Bank of Australia.The head of the US government’s Energy Information Administration, Guy Caruso, told Reuters the world market could not afford to lose such a large supply of crude.- Nampa-ReutersIn a statement e-mailed to Reuters yesterday, the group said it had widened its attacks to Agip and Total facilities and would also target Chevron.Agip and Total issued denials.US crude oil climbed as far as US$66,91 a barrel, the highest since September 30 last year, and was up 52 cents at US$66,83 at 1020 GMT.London Brent crude was up 45 cents at US$65,35.”We have decided not to limit our attacks to Shell as our ultimate aim is to prevent Nigeria from exporting oil,” the rebels said.”Pipelines, loading points, export tankers, tank farms, refined petroleum depots, landing strips and residences of employees of these companies can expect to be attacked.We know where they live, shop and where the children go to school.”Most of Nigeria’s oil is produced in the Niger Delta where an estimated 20 million people live in poverty alongside a multibillion-dollar industry.For the world’s big energy consumers, violence in Nigeria has come at a bad time.Iran’s dispute with the West over its nuclear programme has raised questions about the security of supplies from Opec’s second biggest producer.”Recent disruptions of crude oil production in Nigeria and tensions between the West and Iran over its nuclear programme…have contributed to concerns about Opec’s ability to supply the market,” analysts at Merrill Lynch said.Crude prices have risen more than nine percent since the start of the year.The International Energy Agency sounded a warning on Tuesday over the world’s limited ability to pump extra oil.Almost all the spare capacity of 1,5 million barrels per day is in Opec countries, a level the IEA described as “below comfort levels”.Blanket sanctions such as an oil embargo are thought highly unlikely, but Iran has not ruled out using its 2,4 million bpd of oil exports for leverage.”The Strait of Hormuz, which borders Iran, is the preferred route for around 20 per cent of global oil output.The prospect of this area becoming a military risk adds to the problem,” said Tobin Gorey of the Commonwealth Bank of Australia.The head of the US government’s Energy Information Administration, Guy Caruso, told Reuters the world market could not afford to lose such a large supply of crude.- Nampa-Reuters