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Gulf-Times: Crude prices tumble after Nigerian militants release hostages

Published: Friday, 4 May, 2007
LONDON: Oil prices eased yesterday after Nigerian militants freed several foreign workers seized from an offshore oilfield in the Opec nation, easing fears the conflict would interrupt production.

London Brent crude, currently seen as the most representative of global oil prices, traded 37¢ lower at $65.88 a barrel after falling as low as $65.57 earlier. US crude fell 48¢ to $63.20.

Prices had risen earlier in the session after gunmen took 18 foreign workers in three attacks in Nigeria’s oil-producing Niger Delta. The Movement for the Emancipation of the Niger Delta (Mend) said later it had freed eight of the workers.

Violence in the world’s eighth-largest oil exporter has caused prices to soar in the past, but analysts believe the region’s volatility has already been priced into the market.

Mend said the recent kidnappings should serve as a warning to foreign companies not to return to oilfields previously attacked by the group.

News that Royal Dutch Shell was preparing to restart operations at its 380,000 bpd Forcados oilfields, shut for more than a year due to security concerns, also pressured prices.

The company declined to provide a specific date and many analysts have raised doubts about its resumption.

Militant attacks, which have increased sharply in the past year, have shut output of about 600,000 barrels per day, or a fifth of production capacity.

In Asia, ExxonMobil said it had shut a 115,000 bpd crude unit at its giant Singapore refinery indefinitely as a result of a fire in a related unit, threatening to tighten Pacific Basin gasoline supplies. – Reuters

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