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AP Worldstream: Oil prices flat after rising earlier in week on militant violence in Nigeria

Feb 22nd, 2006
by admin.

Feb 22, 2006
Crude oil prices were flat Wednesday after climbing earlier in the week on concerns that militant attacks on pipelines in Nigeria would disrupt supply.
Light sweet crude for March delivery was unchanged at US$61.10 a barrel in electronic trading on the New York Mercantile Exchange. On Tuesday, it gained US$1.22.
Nymex gasoline futures slid by 0.16 cents to US$1.4741 per gallon, while heating oil futures dipped US$1.6650 a gallon. Natural gas futures rose 54.9 cents to end at US$7.750 per 1,000 cubic feet.
Nigeria is Africa's leading oil exporter and the United States' fifth-largest supplier, usually exporting 2.5 million barrels daily.
The militants, who are pressing for the release of two of the region's leaders from prison and greater control of oil revenues, have threatened to fire rockets at any ships transporting crude oil from Nigeria.
Militants attacked a Royal Dutch Shell Plc-operated pipeline switching station on Monday and a boat they claimed housed Nigerian military personnel, vowing to spread their campaign across the south _ the area from which most of the country's crude is pumped. That, and an earlier attack, has forced Shell to halt the flow of about 455,000 barrels a day _ about one-fifth of the country's daily output, or less than 1 percent of total global demand.
The violence Monday didn't cause further production cuts, but sent prices higher. Shell said Tuesday it was extending its force majeure that protects the company from meeting its contractual obligation on Nigerian oil exports.
The fact that light, sweet Nigerian crude is in high demand, especially in the U.S., makes the latest supply disruptions all the more important, traders said.
Insurgent violence in Iraq also has increased over the past few days, with sabotage to northern Iraqi oil installations halting exports of 400,000 barrels a day. The country produces about 2 million barrels a day, down by about 800,000 barrels from before the U.S.-led invasion.

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