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Financial Times: West Texas catches up with gains for Brent

By Kevin Morrison
Published: February 22 2006 02:00 | Last updated: February 22 2006 02:00
Oil futures in London eased before closing slightly ahead after the large gains from the previous session, triggered by attacks on production facilities in Nigeria. In the US, oil rose sharply as it played catch-up with London following Monday's Presidents' Day holiday.
IPE Brent for March delivery slipped 39 cents in early trade but closed at $61.60, up 6 cents, a barrel in London trade. It had gained $1.65 in the previous session.
The March West Texas Intermediate contract on Nymex added $1.22 to settle at $61.10 a barrel in New York trade. With the March WTI contract expiring at the close of trade yesterday, there was more attention on the April WTI contract, which rose 86 cents to $62.15.
Nigeria's oil exports have fallen by about 25 per cent following militant attacks on oil production facilities and pipelines. Royal Dutch Shell has closed a total of 455,000 barrels a day of oil production in Nigeria, or about19 per cent of its output.
The fall in Nigerian oil output ahead of the March 8 meeting of oil ministers from the Organisation of the Petroleum Exporting Countries has reduced the prospect of the oil cartel cutting output at the meeting.
“Until last weekend, I would have said there was a good chance that Opec would cut output – now I am not so sure, with Nigerian oil exports falling so much,” said Adam Sieminski, global energy strategist at Deutsche Bank.
Venezuela's oil minister last week said he wanted the cartel to cut output by up to 1m b/d, following the increase in oil inventories in the US and Europe.
Gold eased more than $1 to $554.70/$555.60 a troy ounce in late London trade.
“We believe that gold is attempting to find a range with the recent extremes of $535 and $555 likely to confine the metal for a while,” John Reade, precious metals strategist at UBS said in a note.
Base metal prices extended their recovery from the large declines suffered in the past two weeks.
Copper rose for a fourth consecutive day, adding $44 to $4,945 a tonne on the London Metal Exchange. The three-month LME aluminium price gained $52 to $2,425 a tonne. The benchmark zinc price rose more than 5 per cent to $2,235 a tonne, but remains almost $200 below its record high reached two weeks ago.
US cocoa futures fell more than 3 per cent to their lowest level this year, taking their drop in the last month to almost 10 per cent. The New York Board of Trade's cocoa contract for May delivery slipped $30 to $1,455.
The fall in cocoa prices comes at a time whenconfectionery companies have warned of potential cocoa shortages due to increased Chinese chocolate consumption.

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