New York Times: Oil Prices Climb in Asian Trading

EXTRACT: In Nigeria… The group vowed more attacks will follow if their long-standing demands, which include compensation from Royal Dutch Shell PLC for alleged environmental pollution, are not met.

THE ARTICLE

By THE ASSOCIATED PRESS
Published: December 8, 2006
Filed at 2:56 a.m. ET

SINGAPORE (AP) — Oil prices rose in Asian trading Friday, supported by expectations of further production cuts by OPEC countries and amid violence in Nigeria, Africa’s largest oil producer.

Light, sweet crude for January delivery gained 31 cents to $62.80 a barrel in electronic trading on the New York Mercantile Exchange midday in Singapore. The contract on Thursday rose 30 cents to settle at $62.49 a barrel.

January Brent crude at London’s ICE Futures exchange rose 33 cents to $62.90 a barrel.

Prices were supported by uncertainty ahead of a meeting next week of oil ministers from the Organization of Petroleum Exporting Countries. OPEC officials have been pressing in recent days for a cut in output on top of a production cut of 1.2 million barrels a day, approved in October.

On Thursday, Saudi Arabia’s ambassador to the U.S., Prince Turki al-Faisal, said current crude oil prices were ”acceptable and imminently fair.”

The ambassador said oil prices are relatively cheap, noting that if adjusted for inflation, prices would be near $150 a barrel now. He said a price of around $60 a barrel is fair for producer and consumer countries. Higher prices would concern the kingdom, as they impact poorer countries more than rich countries, he said.

In Nigeria, a militant group attacked a southern oil export terminal belonging to a subsidiary of Italy’s Eni SpA early Thursday, taking three Italians and a Lebanese hostage and killing another person, officials said. Agip officials said oil exports at the 200,000 barrels a day terminal were not affected. The group vowed more attacks will follow if their long-standing demands, which include compensation from Royal Dutch Shell PLC for alleged environmental pollution, are not met.

Since the beginning of 2006, militant groups in Nigeria have attacked pipelines and taken workers hostage in violence that has kept about 500,000 barrels a day of Niger Delta crude off the market, although output has grown offshore Nigeria.

Buying of oil futures was kept in check by forecasts of warmer weather in the United States next week.

Temperatures in the U.S. Northeast, the nation’s largest heating oil market, were expected to moderate later in the week, with the National Weather Service forecasting above-normal temperatures through most of the nation next week.

The U.S. National Oceanic and Atmospheric Administration said last month that the unusual warming of water in the Pacific Ocean known as El Nino was expected to continue into winter. The federal Climate Prediction Center said the result could be warmer than normal temperatures over the western and northern United States and western and central Canada.

Natural gas futures fell 6.1 cents to $7.610 per 1,000 cubic feet and heating oil prices were up 1.02 cents to $1.7890 a gallon.

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