Nigeria Homepage: Nigerian threat pushes oil price up to $114

Nigerian threat pushes oil price up to $114
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the punch on 13/01/2012 05:15:00

Brent crude jumped more than $2 to over $114 on Thursday after Nigeria’s
biggest oil union said it would shut down production, as part of a national
strike over the 119 per cent rise in the pump price of petrol following the
removal of subsidy on the product.
Brent crude futures for February jumped by $2.88 to a high of $115.12, trading
around $114.70 at 1500 GMT,Reuters reported.
The United States crude oil price was up by about 1.87 per cent at $102.75.
The Petroleum and Natural Gas Senior Staff Association of Nigeria said it would
aim to shut down oil and gas production from Sunday, though industry officials
expressed doubts that workers’ unions would be able to stop crude exports
completely.
Output from Nigeria has so far been unaffected but the threats were enough to
unnerve the market as Africa’s biggest oil exporter ships around 2.4 million
barrels of crude oil per day and is a key supplier to the United States and
Europe.
Shipping sources told Reuters that offshore oil terminals were operating as
normal on Thursday.
Tension between Iran and the West also supported the rise in prices.
As Washington steps up efforts to punish Tehran over its nuclear programme,
Japan and South Korea looked to reduce oil imports from Iran and seek
alternative sources instead.
Japan, one of the biggest buyers of Iranian oil, pledged on Thursday to take
action to cut its Iran crude imports after US Treasury Secretary, Mr. Timothy
Geithner, visited Tokyo to hold talks with Japanese leaders.
Washington imposed additional sanctions on Iran last month and the European
Union will have a meeting on January 23 to decide on whether to embargo Iran’s
oil.
Tensions elsewhere in the Middle East also supported prices, traders said, as a
Frenchman became the first foreign journalist to be killed in 10 months of
unrest in Syria.
“You’ve got the same potentially bullish factors – Iran, Syria, and
Nigeria – in the background,” Christopher Bellew, a broker at Jefferies
Bache in London, said. “If it weren’t for Iran, probably prices would be
lower.”
Worries about supply allowed investors to discount reports of sharply higher US
crude stocks and disappointing economic data.
Inventories surged by almost five million barrels to 334.65 million barrels in
the week to January 6, data from the US Energy Information Administration
showed. This was well above estimates for an 800,000-barrel build in a Reuters
poll.
US retail sales figures released on Thursday revealed the weakest growth in
retail sales in seven months, and data from the Labour Department showed a
six-week high in the number of Americans applying for first-time jobless
benefits.
US sales were up by just 0.1 per cent in December, as consumers pulled back
their spending, especially at department stores and on electronic gadgets.