Oil prices rally on supply jitters
Sunday, 10 February 2008
NEW YORK, Feb 9 (AFP): Oil prices rose strongly yesterday on supply disruptions in Nigeria, Africa's biggest oil exporter, and amid expectations of colder weather in key energy consumer the United States, traders said.
New York's main oil futures contract, light sweet crude for delivery in March, closed up a hefty 3.66 dollars at 91.77 dollars per barrel.
In London, Brent North Sea crude for March delivery settled up 3.43 dollars at 91.94 dollars.
Energy giant Shell said Thursday it would not be able to honor all its export contracts from its southern Nigerian Bonny export terminal for the rest of February and March because of sabotage.
The company said it had not been able to repair three pipeline leaks on the Nembe Creek trunk because of "serious security challenges."
It did not give figures on the expected loss in production but industry sources estimate thousands of barrels of crude will be lost.
Shell is Nigeria's largest oil operator, accounting for around half of the country's daily output of 2.6 million barrels at peak production, but unrest in the Niger Delta has slashed production by a quarter since January 2006.
Shell has declared a force majeure, which allows companies to suspend contractual obligations such as deliveries of oil and gas following unforeseen events, without incurring penalties.
While supply worries boosted oil prices Friday, rising crude inventories in the United States and fears that demand could fall should the global economy falter have seen prices decline since striking historic highs above 100 dollars a barrel in early January.
Prices fell more than a dollar Wednesday after the US government reported another rise in crude oil inventories amid mounting worries that demand for energy would fall owing to the weak US economy.
The US Department of Energy said American crude inventories had jumped by 7.0 million barrels in the week ending February 1, marking a fourth straight rise in stocks.
New York's main oil futures contract, light sweet crude for delivery in March, closed up a hefty 3.66 dollars at 91.77 dollars per barrel.
In London, Brent North Sea crude for March delivery settled up 3.43 dollars at 91.94 dollars.
Energy giant Shell said Thursday it would not be able to honor all its export contracts from its southern Nigerian Bonny export terminal for the rest of February and March because of sabotage.
The company said it had not been able to repair three pipeline leaks on the Nembe Creek trunk because of "serious security challenges."
It did not give figures on the expected loss in production but industry sources estimate thousands of barrels of crude will be lost.
Shell is Nigeria's largest oil operator, accounting for around half of the country's daily output of 2.6 million barrels at peak production, but unrest in the Niger Delta has slashed production by a quarter since January 2006.
Shell has declared a force majeure, which allows companies to suspend contractual obligations such as deliveries of oil and gas following unforeseen events, without incurring penalties.
While supply worries boosted oil prices Friday, rising crude inventories in the United States and fears that demand could fall should the global economy falter have seen prices decline since striking historic highs above 100 dollars a barrel in early January.
Prices fell more than a dollar Wednesday after the US government reported another rise in crude oil inventories amid mounting worries that demand for energy would fall owing to the weak US economy.
The US Department of Energy said American crude inventories had jumped by 7.0 million barrels in the week ending February 1, marking a fourth straight rise in stocks.