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Apr-18-2008Oil bounces back higher on supply fears to hit a record of $116.10 ...(topic overview)
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LAGOS, Nigeria -- The main militant group in Nigeria's restive southern region said Friday it had sabotaged a major oil pipeline and promised further attacks on the petroleum industry in Africa's biggest crude producer. The Movement for the Emancipation of the Niger Delta said its fighters hit the pipeline operated by a Royal Dutch Shell PLC joint venture in southern Rivers state overnight. [1] Oil futures, meanwhile, surged to a new record over $116 a barrel after a militant group in Nigeria said it had sabotaged a major oil pipeline operated by a Royal Dutch Shell PLC joint venture and promised further attacks on the country's petroleum industry.[2]
Supply fears have been stoked after Nigerian militants claimed Friday to have sabotaged a major oil pipeline belonging to Anglo-Dutch oil group Royal Dutch Shell (nyse: RDSA - news - people ), promising 'many more' similar attacks.[3] Prices are also taking support from supply concerns, with Nigerian militants claiming Friday to have sabotaged a major oil pipeline belonging to Anglo-Dutch oil group Royal Dutch Shell (nyse: RDSA - news - people ).[4] With book-squaring ahead of the weekend exaggerating moves, and many analysts remaining bearish on the medium-term outlook for the dollar, prices have found support. Citigroup (NYSE:C) analyst Tim Evans said: 'While any major decline could grow from a minor retreat such as this one, we think it is too soon to distinguish this pullback from any of the minor Friday losses that have been sprinkled throughout the larger advance.' Prices are also taking support from supply concerns, with Nigerian militants claiming Friday to have sabotaged a major oil pipeline belonging to Anglo-Dutch oil group Royal Dutch Shell.[5] Meanwhile on Friday, prices drew modest support from supply concerns in Nigeria, where militants claimed to have sabotaged a major oil pipeline belonging to Anglo-Dutch oil group Royal Dutch Shell.[6]
The most prominent militant group in Nigeria's southern oil-producing region said Friday it had sabotaged a major oil supply pipeline belonging to Anglo-Dutch oil group Shell.[7]
NIGERIA: Militants have sabotaged a major Shell oil pipeline in Nigeria - and warned that more violence will follow.[8]
NEW YORK (AFP) — Crude oil prices crossed 116 dollars a barrel here for the first time Friday after a pipeline attack in Nigeria, Africa's biggest oil producer.[7] Bonny is the largest export terminal in the country with a storage capacity of around 7 million barrels of crude oil. There was no clear indication for this specific attack, but MEND has reigned terror over the region for close to three years now. They claim to be fighting for a greater share of the country's vast oil wealth, saying it is not filtered down to desperately poor areas. Nigeria is Africa's largest oil producer but has seen its production cut by almost a quarter because of constant kidnappings and raids by the militants. MEND has lately been enraged by the capture one of its leaders, Henry Okah, an alleged illegal arms dealer, who is on trial in a closed court on treason and terrorism charges. He could face the death penalty. He was extradited to Nigeria earlier this year after his arrest last year in Angola.[8] Shell spokesmen in Nigeria and the Netherlands were unable to immediately confirm the attack due to the remoteness of the area in which MEND claim to have struck. Shell, Nigeria's largest oil operator accounting for around half of the country's 2.1 million barrels per day output, has seen a wave of attacks on its facilities in recent months.[5]
The report is being investigated and further information will follow when available," said spokeswoman Caroline Wittgen. MEND announced in September it would recommence attacks on oil installations and abduction of expatriates following the arrest of one of its leaders, Henry Okah, on arms trafficking charges in Angola. His trial began this month. Shell is producing around 400,000 barrels per day below its full capacity from Nigeria because of attacks and kidnappings by MEND since 2006 that have contributed to a rise in world oil prices.[9]
MEND, which came to prominence in early 2006 has claimed responsibility for a series of attacks on Nigeria's oil industry and related sectors in the past two years. [email protected] ds1/ds1/rfw Copyright Thomson Financial News Limited 2008.[10] LONDON (Thomson Financial) - Oil bounced back higher to set a new record high of $116.10 in New York as traders refocused on supply fears heading into the weekend, after earlier seeing prices come off due to a rebound in the dollar.[3] New York's main oil futures contract, light sweet crude for delivery in May, fell $1.06 to $113.80 per barrel, after hitting a record $115.54 on Thursday.[6] At 12:28 p.m., New York's West Texas Intermediate crude for May delivery was down 62 cents at $114.24 per barrel, having hit a record $115.54 on Thursday.[4] In a day marked by sharp volatility in the market, light, sweet crude for May delivery rose to a new record of $116.10 on the New York Mercantile Exchange before retreating to trade at $115.44 per barrel, 58 cents higher than Thursdays settlement.[11] At 4.39 p.m., New York's West Texas Intermediate crude for May delivery was up 47 cents at $115.33 per barrel, having eased slightly since setting new highs.[3]
Light, sweet crude for May delivery was recently up 70 cents, or 0.6%, at $115.56 a barrel on the New York Mercantile Exchange after rising to $116.10, a.[12]
In London, Brent crude for June delivery was up 47 cents at $112.90 per barrel, after touching a new all-time high of $113.57.[3]
The contract had fallen to close to $113 per barrel in overnight electronic trading as the dollar strengthened against the euro and other currencies.[11]
LONDON: Oil prices pulled back on Friday after striking record highs above $115this week on the back of a weakening U.S. dollar and weak American energy stockpiles, analysts said.[6] The crude market's current focus on the dollar has led some analysts to warn that oil could be at risk of a correction, as the price has moved ahead of crude's traditional drivers of supply and demand. Citigroup (NYSE:C) analyst Tim Evans said: 'As one indication of how the crude oil market has outrun even one ostensible reason for its climb, we note the U.S. dollar index has now declined 11.8 percent since August, while crude oil prices have gained 65.8 percent, all while crude oil's physical fundamentals have mostly gone nowhere.' However, few appear willing to bet against crude making further gains yet, as the ongoing weakness in the dollar continues to fuel speculative buying. 'It is quite clear that investors are not prepared to liquidate oil futures at the moment, with strong fund and speculator interest as they seek better returns in commodities,' said Sucden analysts on Thursday.[10]
LONDON, Apr. 18, 2008 (Thomson Financial delivered by Newstex) -- Oil prices eased after the U.S. dollar pulled away from its recent lows, sparking a round of profit-taking following Thursday's record highs.[5]
"The broad weakness in the U.S. dollar is still supporting commodities; while oil investors are also concerned about tight gasoline (petrol) supplies in the U.S. ahead of the summer driving season when demand for gasoline peaks," Kryuchenkov said. Prices rocketed to historic heights this week after news of sliding energy stockpiles in key consumer the United States.[6]
U.S. crude oil inventories slumped 2.3 million barrels last week compared with the consensus forecast for a drop of 1.8 million. Crude reserves in the United States now stand at 313.7 million barrels, in the lower half of the average range for this time of year.[6] The targeted pipeline was connected to the Bonny exports terminal -- the largest in the country with a storage capacity of around seven million barrels of crude oil.[7]
The groups fund themselves by stealing crude oil from damaged pipelines and selling it to rogue petroleum traders.[13]
The news of an explosion follows a claim earlier Friday from militant group The Movement for the Emancipation of the Niger Delta that it had sabotaged a pipeline at Adamakiri, located in the Cawthorne area.[14] The main group of gunmen in the region - known as The Movement for the Emancipation of the Niger Delta (MEND) - struck the Bonny exports terminal pipeline overnight.[8] A statement from the Movement for the Emancipation of the Niger Delta (MEND) said it attacked the Shell pipeline, which crosses from the Cawthorne Channel to the Bonny terminal, at Adamakiri in Rivers state late on Thursday.[9] The Movement for the Emancipation of the Niger Delta (MEND) said in a statement that it had carried out the sabotage operation late Thursday in Rivers state.[7]
LAGOS, April 18 (Reuters) - Rebels in Nigeria's oil-producing Niger Delta said on Friday they sabotaged a major pipeline operated by Royal Dutch Shell (RDSa.L: Quote, Profile, Research ), and a company spokeswoman said it was investigating reports of an explosion. [9] LONDON -(Dow Jones)- The Shell Nigeria Joint Venture received a report of an explosion in the Cawthorne Channel area of the Niger Delta Thursday, a spokesman for the joint venture said Friday.[14]
A spokeswoman for Shell -- the company which has been worst hit by Niger Delta violence -- could not immediately confirm whether an attack had taken place.[9]
The Niger delta oil industry is often attacked by militants. The same group that says it carried out the latest sabotage has promised "total war" on oil companies and the Nigerian government if foreign firms don't leave the region and hand their operations over to locals.[13]
Some analysts call for prices to peak near $3.80 a gallon; the Energy Department, in a recent forecast, said prices could average $4 a gallon nationally at times. Oil continued pushing to new records, pulling gas prices higher despite the fact that demand for the expensive fuel has fallen this year. [2] John Wilen April 18, 2008 - 11:22 a.m. NEW YORK (AP) - Retail gas prices set new records Friday on their seemingly relentless march toward $3.50 a gallon, and diesel prices pushed further above $4 a gallon.[2]
Crude-oil futures reversed early losses and sprang to a new record above $116 a barrel Friday as the traders fretted over supply concerns in Nigeria.[12]
'We saw crude come down earlier on off the back of the stronger U.S. dollar, but the underlying factor is there are still supply concerns for crude,' said CMC Markets trader Nas Nijjar, adding that some traders were using crude's earlier decline to re-establish long positions ahead of WTI's contract expiry next week.[3] A host of supply and demand concerns in the United States and abroad, along with the dollars weakness, have served to support prices, even as record retail gasoline prices in America appear to be dampening demand. Crude prices have risen as much as 4 percent this week.[11] In recent weeks, disruptions to crude supplies have contributed to a series of record oil prices on international markets.[13] At the pump, the national average price of regular gas rose 2.7 cents overnight to a record $3.445 a gallon, according to a survey of stations by AAA and the Oil Price Information Service.[2]
The contract touched a historic $113.38 on Thursday. "Oil prices were lower, coming off after robust gains earlier this week," said Sucden analyst Andrey Kryuchenkov on Friday.[6] Investors have also been encouraged to buy into commodities in a bid to hedge against a weakening currency and ongoing financial turmoil. Oil hit all time highs this week after the dollar slipped to almost $1.60 against the euro.[4] The greenback's slump close to $1.60 against the euro has made prices relatively cheaper for overseas buyers, whilst at the same time encouraging investors to buy into commodities in a bid to hedge against a weakening currency and ongoing financial turmoil.[15]
Supply fears are helping to prop up prices as many view current market conditions as tight. [email protected] ds1/lam Copyright Thomson Financial News Limited 2008. [5] The content on this site, including news, quotes, data and other information, is provided by Thomson Financial News and its third party content providers for your personal information only, and neither Thomson Financial News nor its third party content providers shall be liable for any errors, inaccuracies or delays in content, or for any actions taken in reliance thereon.[4]
A surge in U.S. equity markets today is also reducing the appeal of crude markets as a financial hedge against the recent economic turmoil and dollar weakness. [3] While crude prices have slipped slightly on Friday, with end-of-week profit-taking knocking the top off recent gains, prices remain well supported by historical dollar weakness on two fronts.[15]
Few appear willing to bet against crude making further gains yet, as the ongoing weakness in the dollar continues to fuel speculative buying. 'It is quite clear that investors are not prepared to liquidate oil futures at the moment, with strong fund and speculator interest as they seek better returns in commodities,' said Sucden analysts on Thursday.[4] The Cawthorne Channel is located in the southern part of the Delta, near the Bonny Light crude oil shipping facility.[14]
In recent months, the group has not carried out any attacks which have had a further significant impact on oil production.[9]
"The market was relatively quiet but still supported by persistent supply concerns and the weak dollar." The U.S. unit, which hit a fresh record low against the euro on Thursday, stimulates demand for dollar-priced goods because they become cheaper for foreign buyers holding stronger currencies. [6] U.S. gasoline stocks fell 5.5 million barrels in the week ending April 11, considerably more than market expectations for a fall of 1.8 million barrels. Traders are focused on gasoline supplies ahead of the peak demand season for motor fuel that starts in May when Americans take to their cars for their holidays.[6]
All times are ET. : Time reflects local markets trading time. - Intraday data delayed 15 minutes for Nasdaq, and 20 minutes for other exchanges. Disclaimer [5]
SOURCES
1. Free Preview - WSJ.com
2. Gas prices push closer to $3.50 a gallon, while oil hits $116 on Nigeria attack claim | Markets | Market News | Canadian Business Online
3. Oil bounces back higher on supply fears to hit a record of $116.10 in New York - Forbes.com
4. Oil pulls back towards $114 as dollar takes on firmer tone - Forbes.com
5. Oil eases as U.S. dollar pulls away from recent lows
6. Oil prices ease from record highs- Indicators-Economy-News-The Economic Times
7. AFP: Oil prices cross 116 dollars a barrel in New York
8. World Current: Militants sabotage Shell pipeline
9. UPDATE 1-Nigerian rebels say attack major Shell pipeline | Markets | Markets News | Reuters
10. Oil pulls back towards $114 as dollar takes on firmer tone
11. Crude slips after breaching $116 - International Herald Tribune
12. Free Preview - WSJ.com
13. Nigerian militants claim sabotage of major oil pipeline
14. Actualit' de la bourse sur Total - FP : interviews, rumeurs de march's, analyses, dossiersEasyBourse
15. Oil edges lower but holds close to highs on weak dollar UPDATE
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