Oil prices surge on Nigeria militant threat

LONDON – World oil prices hit a three-and-a-half-month high yesterday after militants said they would broaden attacks on Nigeria’s oil industry, threatening to cut deeper into supplies from the world’s eighth biggest exporter.

US crude surged more than two per cent to US$65,53 (N$393,18) a barrel after Monday’s US holiday then eased to US$65,38. Oil is within sight of its US$70,85 record of Aug 30, fired by Nigerian violence and Iran’s duel with the West over its nuclear programme.Yesterday’s push above US$65 came as militants behind a spate of kidnappings and attacks on oil facilities in the West African nation’s oil-rich Niger Delta threatened to use more aggressive tactics against oil workers and their families from Feb 1.”Nigeria’s escalating problems…are boosting prices.Nigeria puts almost 2,5 million barrels of crude into the market daily – around three per cent of global oil output,” said analyst Tobin Gorey of the Commonwealth Bank of Australia.The country’s biggest foreign operator, Royal Dutch Shell, has already evacuated staff from some facilities and scaled back output as violence escalated over the past week.”Nigeria has always been a difficult place and now they have targeted the offshore platforms.They’ve never done that before.Obviously, that’s very dangerous,” said Craig Pennington, an analyst with investment bank Schroders.London Brent crude was up US$1,03 at US$64,21 at 1102 GMT after rising 58 cents on Monday when European markets were open.Kidnapped oil workers listed the militant group’s demands as local control of the Niger Delta’s wealth, payment of US$1,5 billion by Shell to the state government for pollution and the release of ethnic leaders.Crude prices in New York have risen more than seven percent since the start of the year as doubts have grown about the reliability of supplies from Nigeria and Iran, and Iraq’s oil industry struggles to get back on its feet.Strong buying by big investment funds has added impetus.The US and the EU say EU-led talks with Iran have failed to quell suspicion that Tehran is seeking a nuclear bomb, despite its denials, and it is time the UN nuclear watchdog agency sent the case to the Security Council.- Nampa-ReutersOil is within sight of its US$70,85 record of Aug 30, fired by Nigerian violence and Iran’s duel with the West over its nuclear programme.Yesterday’s push above US$65 came as militants behind a spate of kidnappings and attacks on oil facilities in the West African nation’s oil-rich Niger Delta threatened to use more aggressive tactics against oil workers and their families from Feb 1.”Nigeria’s escalating problems…are boosting prices.Nigeria puts almost 2,5 million barrels of crude into the market daily – around three per cent of global oil output,” said analyst Tobin Gorey of the Commonwealth Bank of Australia.The country’s biggest foreign operator, Royal Dutch Shell, has already evacuated staff from some facilities and scaled back output as violence escalated over the past week.”Nigeria has always been a difficult place and now they have targeted the offshore platforms.They’ve never done that before.Obviously, that’s very dangerous,” said Craig Pennington, an analyst with investment bank Schroders.London Brent crude was up US$1,03 at US$64,21 at 1102 GMT after rising 58 cents on Monday when European markets were open.Kidnapped oil workers listed the militant group’s demands as local control of the Niger Delta’s wealth, payment of US$1,5 billion by Shell to the state government for pollution and the release of ethnic leaders.Crude prices in New York have risen more than seven percent since the start of the year as doubts have grown about the reliability of supplies from Nigeria and Iran, and Iraq’s oil industry struggles to get back on its feet.Strong buying by big investment funds has added impetus.The US and the EU say EU-led talks with Iran have failed to quell suspicion that Tehran is seeking a nuclear bomb, despite its denials, and it is time the UN nuclear watchdog agency sent the case to the Security Council.- Nampa-Reuters