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Oil Little Changed as IEA Cuts Forecast, Nigeria Rebels Attack

BLOOMBERG

By Grant Smith and Yee Kai Pin

June 29 (Bloomberg) — Crude oil traded little changed after Nigerian militants said they attacked a Royal Dutch Shell Plc oil platform, while the International Energy Agency downplayed concerns of a supply crunch.

The Movement for the Emancipation of the Niger Delta rebel group said they attacked Shell’s Forcados offshore oil facility at 3:30 a.m. local time today.

The IEA, an adviser to 28 oil- consuming nations, cut five-year forecasts for global crude demand because of the economic slump.

“Bullish participants are seizing on the latest attacks in Nigeria to take another run at $70,” said Christopher Bellew, senior broker at Bache Commodities Ltd. “We may get to $70 a barrel but unless demand improves it will be very difficult to stay there.”

Crude oil for August delivery traded for $69.20, 4 cents higher, in after-hours electronic trading on the New York Mercantile Exchange as of 9:48 a.m. London time. Oil is poised for a quarterly gain of 39 percent, the biggest in a decade.

The IEA cut its oil demand estimates for every year through 2013 by about 3 million barrels a day, it said in its Medium- Term Oil Market Report today. Consumption will average 86.76 million barrels a day in 2012, the first year demand will rise above 2008’s level of 85.76 million barrels a day, according to the Paris-based agency.

“The deep economic recession that has spread worldwide in the past year has taken a severe toll on oil demand,” the IEA said in the report, updating estimates made in December. “This marks a break after several years of strong oil demand growth.”

Estuary Field Closed

Royal Dutch Shell Plc also closed Nigeria’s Estuary oil field after attacks on production wells, spokesman Tony Okenodo said by phone from Lagos today. Nigeria, vying with Angola to be Africa’s largest producer, has been losing about 20 percent of its production since 2006 because of militant violence.

New York oil futures have gained 55 percent this year, as the recent rise in world equity markets and a weaker dollar encouraged investors to buy the commodity as a hedge against inflation and to profit if demand recovered. Futures are headed for their strongest first-half finish since 1999, when prices rose 60.1 percent in six months.

Brent crude oil for August settlement traded for $69.01 a barrel, 9 cents higher, on London’s ICE Futures Europe exchange.

To contact the reporters on this story: Yee Kai Pin in Singapore at [email protected]Grant Smith in London at [email protected]

Last Updated: June 29, 2009 05:08 EDT

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