Sun, Oct 03, 2004 - Page 10 News List

Light sweet crude passes US$50 in New York trading


Oil prices rebounded higher on Friday, with prices in New York closing above US$50 a barrel for the first time, as traders fretted about Nigerian oil production amid a threatened rebel uprising.

The light sweet crude November futures contract on the New York Mercantile Exchange closed up US$0.48 at US$50.12 a barrel, posting a record close, on the latest Nigerian worries.

In London, the price of reference Brent North Sea crude oil for delivery in November rose US$0.24 to close at US$46.62 a barrel.

Oil prices hit all-time peaks of US$50.47 in out-of-hours deals in New York on Tuesday and US$46.80 in London on Tuesday amid unrest in Nigeria.

"There are still concerns about Nigeria," said New York-based Refco oil analyst Marshall Steeves, referring to Friday's closing price spike.

Unrest in Iraq and disruption to Gulf of Mexico oil output, caused by recent hurricanes that have struck Florida, have also stoked oil prices in recent weeks, tightening US domestic stocks.

"Concern about Nigeria, because a lot of Nigerian oil goes to making gasoline," said Mike Fitzpatrick, an oil trader with Fimat in New York.

"I don't know if worries about gasoline inventories are justified, [there] appears to be plenty of gasoline in stockpiles," Fitzpatrick said, adding traders often worry about supplies on Fridays as they depart for the weekend.

Traders are holding their breath that the Nigerian government, in peace talks with rebels, will be able to stave off a threatened uprising by the rebels, who said they would mount an all-out war on the government if their demands were not met. The country is a key supplier to the US and Africa's biggest oil exporter.

Asari's Niger Delta People's Volunteer Force has threatened oil installations and asked foreign oil workers to quit the region. It is one of the militias fighting for supremacy over control of the west African country's illegal oil traffic.

The group claims to be fighting for the rights of the ethnic Ijaws living around the center of Nigeria's Niger delta oil industry, which turns out about 2.3 million barrels per day.

However, just after the New York market closed, two other militias in the delta, the People's Volunteer Force and the Niger Delta Vigilante, reportedly promised they would stop fighting government forces and hand in their weapons.

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