Sun, Feb 18, 2007 - Page 5 News List

Fears of Nigeria attacks push up oil prices

THE LONG WEEKEND A warning of militant activity from the US consulate in the West African state followed downward pressure exerted by comfortable stock levels


World oil prices rose on Friday on fears of renewed unrest in Nigeria, as traders positioned for a long weekend in the US, analysts said.

New York's main oil futures contract, light sweet crude for delivery in March, gained US$1.40 to US$59.39 a barrel.

In London, the price of Brent North Sea crude for April delivery climbed US$1.35 to US$58.95 a barrel.

"The US consulate [in Nigeria] has said one of the militant groups in Nigeria is planning to expand their attacks," Sucden analyst Michael Davies said in London.

Nigeria is the sixth-biggest exporter of crude oil, and the biggest in Africa. Oil facilities in the Niger Delta are regularly subject to attacks by militant separatists.

Despite Friday's rise, oil prices were down on the week and will remain "under pressure as winter draws to an end, while stock levels remain comfortable as we head into the traditionally lower-demand second quarter," Davies added.

Fimat analyst Mike Fitzpatrick said: "The rise is purely technical before the long weekend."

US markets are closed tomorrow for the Presidents' Day holiday.

"The news about Nigeria also helped but the market is going to need something more substantial than this report to make it go higher," he said.

World oil prices had finished mixed on Thursday, with Brent crude falling briefly below US$57 a barrel as traders focused on the buoyant state of the US' energy stockpiles.

It has been a volatile week for oil prices, beginning with a slump of more than US$2 on Monday in response to Saudi Arabian comments that appeared to pour cold water on further output cuts by the OPEC cartel.

During the week, OPEC said it was maintaining its estimate for the growth of oil demand this year at 1.5 percent, in line with its previous monthly report.

On Tuesday, prices staged a strong rebound after the International Energy Agency raised its own estimate for world oil demand this year, closing up more than US$1 in New York.

Then, on Wednesday, they tumbled again following a smaller-than-expected decline in stockpiles of US distillates.

Reserves of distillates, including heating fuel, fell by 3 million barrels to 133.3 million in the week ending Feb. 9, according to the US Department of Energy.

Analysts had expected a larger drop of 4 million barrels amid freezing weather in the US, the world's biggest energy consumer.

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