[Peakoil] Nigeria and Iran push oil price higher

[POLLARD,Sandy]

Thanks, Jenny! Some comments on context:
 
My understanding is that Iran is the (world) 4th largest oil 'producer'
(2nd biggest OPEC), Nigeria the (world) 8th.
 
>Oil analysts say cutbacks in Nigeria will hurt the market badly because
the country produces light sweet crude, which is particularly coveted by
refineries. 
 
SP: This is getting particularly important because it appears that the
'sweet light crude' crude oil sub-category peaked during 2004, and (of
course!) is now in decline. Construction of more refinery capacity to
handle the sour (more sulphur) oils takes time and much investment.
 
>Traders were also monitoring the escalating crisis over Iran as Tehran
warned the West that UN sanctions over its controversial nuclear
programme could provoke a world oil crisis.
 
SP: This is true. Katrina took out 2 Mb/day out of US production, and
there had to be a concerted IEA effort to move product (esp refined
product) from reserves around the globe. It was around this time that
Adelaide nearly ran out of petrol, apparently because of tanker
diversions.
 
Even apart from this though, the US has a dilemma. See:
 
http://www.energybulletin.net/7707.html .
 
..and:
http://www.energybulletin.net/12125.html

 

Sandy Pollard


 

  -----Original Message-----
From: peakoil-bounces+sandy.pollard=dewr.gov.au at act-peakoil.org
[mailto:peakoil-bounces+sandy.pollard=dewr.gov.au at act-peakoil.org] On
Behalf Of Jenny Goldie
Sent: Friday, January 20, 2006 10:33 AM
To: ACT Peak Oil discussion Oil discussion
Subject: [Peakoil] Nigeria and Iran push oil price higher



Oil prices hit four-month highs
From: Agence France-Presse 
by Antoine Agasse

January 20, 2006 
 

WORLD oil prices jumped to four-month highs overnight as simmering
tensions in Nigeria and Iran overshadowed news of rising US energy
stockpiles, dealers said.

New York's main contract, light sweet crude for delivery in February,
rose $US1.10 to close at $US66.83 a barrel, its highest finish since
September 19. 

In London, the price of Brent North Sea crude for March delivery
advanced $US1.04 to finish at $US65.23 a barrel. 

Prices went up despite "bearish" inventory numbers from the US
Department of Energy (DoE), AG Edwards analyst Bill O'Grady said. 

"I think what the oil market is telling us is that they are very
concerned about problems in Nigeria, problems in Iran," he said.  

 

In Nigeria, Africa's biggest crude producer, the oil industry was braced
for more attacks on its facilities after a separatist group which claims
responsibility for kidnapping four foreign workers threatened further
violence. 

Oil industry security experts said they feared separatist militants -
having blown up several pipelines, kidnapped oilmen and killed at least
five government soldiers with apparent impunity - would strike again. 

Anglo-Dutch energy giant Shell, Nigeria's biggest producer and so far
the main target of the attacks, has been forced to cut output by 226,000
barrels per day (bpd) since the crisis began over a week ago. 

Oil analysts say cutbacks in Nigeria will hurt the market badly because
the country produces light sweet crude, which is particularly coveted by
refineries. 

Traders were also monitoring the escalating crisis over Iran as Tehran
warned the West that UN sanctions over its controversial nuclear
programme could provoke a world oil crisis. 

"In case of sanctions, other countries will suffer as well as Iran," Oil
Minister Davoud Danesh-Jafari said, according to the official news
agency IRNA. 

"One of the consequences will be the unleashing of a crisis in the oil
sector and particularly a price hike," he added. 

Iran, the second-biggest crude exporter in the Organisation of Petroleum
Exporting Countries, exports an estimated 2.7 million bpd. 

The geopolitical tensions overshadowed the DoE's news that US energy
stockpiles went up across the board in the week ended January 13, which
would normally have depressed oil prices. 

Crude stocks rose 2.7 million barrels over the week to total 321.4
million barrels, the DoE said. 

That was 12-percent higher than year-ago levels and trounced market
forecasts for a 100,000-barrel fall in US crude stocks. 

Supplies of distillate products, used to make heating fuel and diesel,
rose 900,000 barrels to 134.7 million. Reserves of gasoline, or petrol,
were up 2.8 million barrels at 211.6 million, the DoE said. 

"The weather is very mild in the US so the builds in stocks are not a
huge surprise," said Investec analyst Bruce Evers. 

"Demand is growing, and we still have uncertainties in Nigeria, and the
ongoing situation in Iran continues to worry," Evers added. "The
sentiment is still very positive and the market in a very bullish mood."


O'Grady at AG Edwards said the higher US inventory figures, in fact,
reflected speculative buying sparked by fear of supply shortfalls in
Iran and Nigeria. p>"I don't think we are close to seeing a disruption
of supply in Iran, and actually these problems in Nigeria are pretty
common," he said. 

"The issue is not imminent but what you are seeing is a desire by oil
consumers to build inventories. 

"And that buying of stocks levels means that the build in inventories,
although usually it would be considered bearish, doesn't have that much
of an impact. Because really what it shows is greater demand." 

<mailto:jgoldie at snowy.net.au> 

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