- LONDON (Reuters) - Oil prices
rose to record highs Monday near $50 a barrel for U.S. crude as Nigeria
emerged as the latest focus for worries about supply in an already tight
worldwide energy market.
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- U.S. light crude rose 82 cents to $49.70 a barrel to
mark their loftiest level in the 21 years of trade on the New York Mercantile
Exchange.
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- London Brent, the benchmark for European crude imports,
rose 79 cents to a record $46.12 a barrel.
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- "We now think that (U.S.) crude oil could reach
$61 before a meaningful sell-off occurs," investment bank Morgan Stanley
said in a report to its clients.
-
- Growing concerns over militancy in Nigeria, OPEC's fifth-largest
producer, are compounding worries about supply security in Russia, Saudi
Arabia and Iraq.
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- "All these factors create apprehension in the market
and reinforce the view that we're on a knife's edge in terms of supply
and demand," said Daniel Hynes, industry analyst at ANZ Bank in Melbourne.
"The uncertainties heighten the risk premium applied to this market."
-
- Global supplies have risen strongly this year but are
still straining to meet the fastest demand growth in 24 years. World crude
output is close to its limit after many years when OPEC producers kept
large volumes untapped.
-
- The lack of a supply cushion has reinforced the view
among some investors that oil near $50 is not overpriced, despite a 50
percent jump crude prices since the start of the year.
-
- "The market faces the prospect of years without
sufficient flexibility or insulation from shocks during a period of extreme
geopolitical stress," said analyst Paul Horsnell of Barclays Capital.
-
- In Nigeria, rebels seeking political reforms in the impoverished
oil-producing Niger delta forced the closure by Royal Dutch/Shell of 30,000
barrels a day as a security precaution.
-
- The militants, threatening output from the country that
pumps 2.5 million barrels daily, said at the weekend they would seek to
extend the uprising across the West African producer's entire southern
delta oil region.
-
- Separately, Nigeria already has been forced to cut back
output from surge capacity to prevent long-term damage to its aging facilities
-- the first sign that efforts by OPEC countries to quell prices by squeezing
out extra output may not be sustainable.
-
- Presidential Adviser on Petroleum Edmund Daukoru told
Reuters that production was reduced 10 percent to base capacity of 2.25
million bpd in August. Nigeria had been pumping at surge capacity of up
to 2.55 million bpd.
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- Uncertainty over supplies from YUKOS, Russia's top exporter,
also is supporting prices. YUKOS last week trimmed deliveries to China.
-
- In Saudi Arabia, clashes between security forces and
suspected al Qaeda followers served as a reminder of the threat to stability
in the world's biggest producer.
-
- In Iraq, insurgents fired mortar bombs at the oil ministry
building Saturday, causing minor damage but no injuries.
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- But Iraqi oil exports, temporarily at least, are as high
as they have been since last year's U.S.-led invasion.
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- Iraqi pipelines have been the target of frequent sabotage
attacks. But Monday deliveries resumed through the main northern line to
Turkey after repairs from a bomb attack Sept 2. Southern exports were near
full capacity.
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- Extra crude from OPEC, now pumping at a 25-year high,
has failed to make any impact. The group produced 30.5 million bpd in September,
the highest since 1979, tanker-tracking consultancy Petrologistics said
Monday.
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- - Additional reporting by the New York Energy Desk and
Tanya Pang in Singapore
-
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