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Nigeria rattles oil markets
Oil prices have jumped sharply, partly reversing the 30% falls seen since the beginning of March. US crude oil prices rose 66 cents to $28.63 while London's benchmark had gained 47 cents to $25.2835 a barrel. ... Oil prices have been given further impetus by social unrest in oil-producing regions of Nigeria, which has already removed more than 800,000 barrels per day - more than 1% of global demand - from the market. The deteriorating situation in Warri, the main city in Nigeria's Delta region, has forced international oil firms such as Shell, ChevronTexaco and TotalFinaElf to reduce output to a trickle. "Two factors are influencing the markets: the potential for Iraqi oil to remain unavailable for longer than expected and the loss of Nigerian oil exports," said analyst Adam Sieminski in a report for Deutsche Bank. Nigeria, which produces some 2.1 million barrels per day of oil, is the world's sixth-biggest exporter, and is especially crucial because of the high quality of its oil. Nigeria is one of the main exporters to the US, which is wary of relying too much on oil from its neighbours in the Americas. The current unrest concerns the Ijaw ethnic group, native to the Delta region, who allege maltreatment at the hands of the security forces. Nigerian armed forces are reportedly protecting oil facilities and other buildings, after Ijaw militants clashed with members of the Itsekiri tribe. The Ijaw feel they are under-represented in national politics, and claim that electoral boundaries have been drawn to favour the Itsekiri. Although oil firms have moved to boost production in other parts of Nigeria, there is little prospect of exports recovering quickly. And two of Nigeria's four refineries are already almost out of crude oil - something that threatens to exacerbate already chronic fuel shortages. Another problem to watch. Posted by: Steve White 2003-03-28 |
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