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Financial Times: Fresh militant attacks force up price of crude

By Kevin Morrison
Published: February 21 2006 02:00 | Last updated: February 21 2006 02:00
Oil prices rose by more than $1 in London yesterday following further sabotage on production and distribution facilities in Nigeria. Attacks by militants, including the kidnapping of nine oil workers on Saturday, have led to a 25 per cent cut in oil exports from Nigeria, the world's eighth biggest crude exporter.
IPE Brent for April delivery added $1.65 to $61.54 a barrel by the close of London trade. The New York Mercantile Exchange was closed for the Presidents' Day holiday in the US. Benchmark West Texas Intermediate ended at $59.88 on Friday.
Fresh attacks were reported yesterday against the Nigerian army anda Royal Dutch Shell oil installation.
The attacks have forced Shell to suspend 455,000 barrels a day of output, about 19 per cent of Nigeria's total.
Although Nigeria's supply problems come while markets are fairly well supplied with oil, the disruption could reduce the likelihood that the Organisation of the Petroleum Exporting Countries will cut production when it meets on March 8.
Nigeria, an Opec member, had been pumping about 2.4m barrels per day of its light, sweet crude oil, which is highly sought after because it is easier to refine into petrol.
Nigeria's geographical location means it is well placed to serve the US and Europe.
Concerns about Nigerian oil supplies pushed up the March IPE gasoil contract by $14.25 to $541.50 a tonne.
UK natural gas futures jumped more than 20 per cent to its highest price in four weeks on the temporary closure of the country's biggest gas-storage site following a fire last week. Centrica, the owner of the Rough gas storage facility, said it did not expect to open the site for a month, which is longer than the market had expected.
IPE natural gas for March delivery add 12.23 pence to 67p per therm.
Gold prices were pushed higher by the rise in the oil price. Gold was quoted at $555.60/$556.50 a troy ounce, up almost $4 from the late quote in New York on Friday. Platinum gained about two per cent on the day to $1,028 an ounce.
Copper prices continued to recover from the large losses incurred two weeks ago with the three-month copper contract on the London Metal Exchange rising for the third successive session. The benchmark contract added $92 to $4,900 a tonne. It has now recouped more than half of its decline from the record high of $5,100 a tonne reached two weeks ago.
The three-month aluminium price gained $68 to $2,373 a tonne, but is still down more than 11 per cent from its 17½ year high reached two weeks ago. Zinc added $86 to $2,131 a tonne.

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