Tuesday June 30, 12:51 PM
Oil jumps above $72 amid Nigeria unrest
LONDON (AFP) - Oil prices rose above 72 dollars on Tuesday after gaining in recent days from tensions in African crude producer Nigeria, analysts said.
New York's main contract, light sweet crude for delivery in August, climbed 59 cents to 72.08 dollars a barrel.
In morning trading here, Brent North Sea crude for August delivery won 62 cents to 71.61 dollars a barrel.
"The ongoing hostilities (in Nigeria) are certainly price supportive, but unless another significant proportion of output is cut, we would only expect the market to show a limited reaction from now on," said VTB Capital commodities analyst Andrey Kryuchenkov.
Nigerian rebels had on Monday announced a new raid against a Shell (LSE: RDSB.L - news) oil facility and said they had killed at least 20 soldiers in a gun battle, a claim denied by the security forces.
While a Shell spokesman confirmed the raid and said it had caused a loss of production, Nigeria's combined police and army joint task force (JTF) denied there had been any clash with the rebels.
The Movement for the Emancipation of the Niger Delta (MEND) militants said the Shell Forcados off-shore platform in Delta state was burning after a massive explosion. The MEND statement also said they had sunk a gunboat with between 20 and 23 soldiers on board.
Monday's raid was just the latest in a series that have targeted Shell facilities this month and which have continued despite last Thursday's offer from President Umaru Yar'Adua of an amnesty for the militants.
Forcados is one of the two main export facilities operated by Shell in Nigeria, along with the Bonny terminal further south in Rivers State.
The Niger Delta has since 2006 been rocked by violence by armed groups who say they are fighting for a greater share of the region's oil wealth for the local population.
The violence aimed at Shell and other oil majors operating in the Niger Delta like Chevron (NYSE: CVX - news) and Agip has forced a cut in crude production by nearly one-third since 2006, when the country produced 2.6 million barrels a day.
Current production is about 1.8 million barrels a day.
In the long term, the world may escape an oil supply crisis for the next five years because a slow recovery from the economic downturn would hold down growth of demand, the International Energy Agency (IEA) said in a report on Monday.
Crude oil futures plunged from record high points of more than 147 dollars in July 2008 to about 32 dollars in December as the economic downturn slashed energy demand but the market has since clawed back ground on recovery hopes.
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