Royal Dutch Shell Plc  .com Rotating Header Image

Bloomberg: Crude Oil Rises After U.S. Says Nigerian Militants Plan Attacks

By Mark Shenk

Nov. 3 (Bloomberg) — Crude oil rose after the U.S. government warned that Nigerian militants are preparing to stage a large-scale attack on oil facilities in the Niger delta.

Militants agreed last month to make a coordinated assault in the region that is responsible for most of Nigeria’s oil output, the U.S. consulate in Lagos said. The attack could take place within days and may include 10 to 20 simultaneous bombings of land-based targets and a series of strikes on oil facilities, the statement said.

“This report on the situation in Nigeria is lending a lot of support,” said John Kilduff, vice president of risk management at Fimat USA in New York. “I don’t think this will be enough to make us break above $59 but nobody will want to go home short this weekend with this type of geopolitical trouble brewing.”

Crude oil for December delivery rose $1.26, or 2.2 percent, to close at $59.14 a barrel on the New York Mercantile Exchange. Prices have fallen 2.7 percent this week and are down 4.3 percent from a year ago. Futures have traded in a range of $56.55 to $61.79 for the past month.

Attacks by the Movement for the Emancipation of the Niger Delta, or MEND, shut down as much as 631,000 barrels a day of Royal Dutch Shell Plc’s venture earlier this year. Jomo Gbomo, a spokesman for MEND, has repeatedly threatened to “cripple” the oil industry in Nigeria, Africa’s biggest producer, by the end of the year.

Nigeria was the fifth-biggest supplier of oil to the U.S. during the first eight months of this year, according to the Energy Department. The nation produces low-sulfur, or sweet, crude oil, prized by refiners for the amount of gasoline it yields.

U.S. Economy

“We’ve got two things at work today, the continuing saga in Nigeria and better economic news,” said Phil Flynn, vice president of risk management with Alaron Trading Corp. in Chicago. “The unemployment number came out better than expected, which comes after a rash of disappointing reports. The market has been looking for a bottom and may have found it now.”

Employers in the U.S. added 92,000 jobs in October, and payroll growth in prior months was revised higher for the second time in a row, pushing the unemployment rate to 4.4 percent, a five-year low. Last month’s gain in employment followed increases of 148,000 in September and 230,000 in August, both higher than previously reported, the Labor Department said today.

The economy stumbled in the third quarter primarily because of the biggest decrease in home construction in 15 years, the government reported on Oct. 27. Gross domestic product increased at an annual rate of 1.6 percent from July through September, the slowest in more than three years. The U.S. consumes 25 percent of the world’s oil.


The Organization of Petroleum Exporting Countries agreed last month to reduce output by 1.2 million barrels a day starting Nov. 1. OPEC ministers will review their cuts when they next meet on Dec. 14 in Abuja, Nigeria. The group produces about 40 percent of the world’s oil.

“The market is skeptical about whether” OPEC will meet its pledge to reduce production, said Andy Sommer, an analyst at HSH Nordbank AG in Hamburg. “Most OPEC states have confirmed that they are sticking to the plan, but it will be a while until we see how much oil really comes on the market.”

Oil may trade near $59 a barrel in New York next week as U.S. inventories rise and OPEC implements cuts. Fifteen of 37 analysts, traders and brokers, or 41 percent, said prices will be little changed, according to a Bloomberg News survey. It’s the first time since Sept. 15 that the biggest percentage of respondents expected prices to be little changed.

UN Resolution

Russia asked today for extensive changes to a United Nations draft resolution designed to block Iran’s nuclear ambitions, deleting most of the proposed sanctions and all references to the Bushehr power plant that Russia is helping Iran to build, Ambassador Vitaly Churkin said. Concern that Iran would retaliate to sanctions by cutting off exports has bolstered oil this year.

The text, written by Britain, France and Germany, would impose a travel ban and asset freeze on officials in Iran’s nuclear program and prohibit acquisition of atomic-bomb or missile technology. It would bar fuel for the Bushehr plant, while allowing the import of construction materials.

Brent crude oil for December settlement rose $1.26, or 2.2 percent, to $59.13 a barrel as of 3:48 p.m., New York time, on the London-based ICE Futures exchange.

To contact the reporter on this story: Mark Shenk in New York at [email protected] .

Last Updated: November 3, 2006 15:51 EST and its sister websites,,,,, and are all owned by John Donovan. There is also a Wikipedia article.

0 Comments on “Bloomberg: Crude Oil Rises After U.S. Says Nigerian Militants Plan Attacks”

Leave a Comment

%d bloggers like this: