Oil Is Steady After Shell Says It Resumed Output at Bonga Field
By Mark Shenk
June 24 (Bloomberg) — Crude oil was little changed in New York after Royal Dutch Shell Plc said that it resumed production at its Nigerian Bonga field that was attacked last week.
Shell shut Bonga output June 19 after militants attacked a production vessel at the field 120 kilometers (75 miles) off the coast of Nigeria. Nigeria was overtaken by Angola in April as Africa’s biggest oil producer because attacks cut the country’s output. Oil rose more than $2 earlier on concern over supplies.
“Any return of Nigerian production is going to be met with relief, especially since most Nigerian grades are among the Cadillacs of crude oil,” said Peter Beutel, president of energy consultant Cameron Hanover Inc. in New Canaan, Connecticut.
Nigeria produces low-sulfur, or sweet, crude oil, prized by U.S. refiners because of the proportion of high-value gasoline and diesel it yields.
Crude oil for August delivery rose 26 cents to settle at $137 a barrel at 3 p.m. on the New York Mercantile Exchange. Prices touched $138.75 earlier today, the highest since reaching a record $139.89 on June 16.
Damage to the platform was “very limited” but force majeure remains in place for the time being, company spokesman Rainer Winzenried said in a phone interview from The Hague.
Following the attack, Shell declared so-called force majeure on Bonga exports, a legal clause that allows producers to miss contracted deliveries because of events beyond their control.
Bonga crude-oil shipments were scheduled to average 190,000 barrels a day in June and about 184,000 barrels a day in July, according to loading schedules.
Brent crude oil for August settlement rose 55 cents, or 0.4 percent, to settle at $136.46 a barrel on London’s ICE Futures Europe exchange. Prices climbed to $137.76 earlier today.
Last Updated: June 24, 2008 16:01 EDT