Daily Independent (Lagos)
Adeola Yusuf
1 July 2009
Lagos — The unrest in the Nigeria's oil-affluent Niger Delta region on Tuesday forced the world to pay higher for a barrel of oil as the commodity price skyrocketed above $73 per barrels before the end of the day's transaction.
The last time oil sold at this price in the global market was October, 2008. Nigeria, Africa's largest oil producer, featured prominently as the cause for the eight-month high price surge, which analysts said the country's economy did not benefit from.
The country's militants on Monday partly damaged and shut down a Royal Dutch Shell offshore oil platform, an action which swiftly shot oil price above $73 per barrel
The Schork Report edited by United States (U.S.) trader and analyst Stephen Schork downplayed the events in Nigeria and their effect on the market, pointing out that Nigeria's share of the U.S. import market had dropped from 11 percent to 6 percent in the past year.
"For all intents and purposes," he said, "the ... turmoil in Nigeria hurts that country more so than the United States."
By midday in Europe, benchmark crude for August delivery was up 23 cents to $71.72 a barrel in electronic trading on the New York Mercantile Exchange after trading as high as $73.38 earlier in the session. On Monday, it gained $2.33 to settle at $71.49.
A weakening United States (U.S.) dollar, unit of exchange for oil transaction was also blamed for the surge.
Schork added that the gains by crude might have been linked to "the desire of fund managers to get some energy exposure into their portfolios ahead of the close of business (Tuesday)."
Other analysts also said prices were boosted by speculative trades and portfolio positioning by investment funds, which typically intensify at the end of a fiscal quarter.
"There is still a lot of oil out there ... and demand for it is still very questionable," Schork said.
U.S. energy consultancy Cameron Hanover mirrored Schork's view on the lack of influence of supply and demand on the market, saying that fundamentals had been "relegated to cocktail conversation in the actual movement of oil prices."
Oil has surged from below $35 in March in part on investor concern that massive U.S. fiscal stimulus spending will eventually spark high inflation. Investors often buy commodities such as crude as a hedge against a weakening dollar and inflation.
The euro gained to $1.4140 on Tuesday from $1.4078 on Monday.
Crude trading volume was about three times more than normal Tuesday in Asia, said Clarence Chu, a trader at market maker Hudson Capital Energy in Singapore.
China boosted state-set gasoline and diesel prices Tuesday to reflect rising global crude costs, days after indicating plans to increase its strategic crude oil reserves by 60 percent over the next five years.
In other Nymex trading, gasoline for July delivery rose 2.92 cents to $1.9650 a gallon and heating oil gained 1.25 cents to $1.7960. Natural gas for July delivery advanced 3.0 cents to $3.974 per 1,000 cubic feet.
In London, Brent prices weer up 15 cents to $71.14 a barrel on the ICE Futures exchange. Earlier in the session, Brent peaked at $73.50.
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Threat or no threat of economic sanctions, let the good people of Niger decide what is best for them. For my brethren up there in Niamey, all you need do is to look south of the border to see what the western-style “democracy” has done for the copy-copy “yessir-yesman” Nigerians. If you think that Mr. Tandja has the wherewithal to deliver quality leadership until he can adequately educate the public & politicians, alike about the principles of democracy, rights of the led and the responsibilities of the leaders by putting the public first, and about the electorates picking the right… [Read Full Text]
Who made Mamadou Tanjda lord over Niger? Are you telling me that this man is the only person in that country that has brains and therefore ordained to lead his people to the promised land? What has he achieved in 10 years that should make him think that he alone has the answer to what the people of Niger need?
Your analysis runs hollow and can only come from somebody who does not believe in the rule of law.
The Western democracy is not perfect, neither is it without its shortcomings, but it is the best model of… [Read Full Text]
That is the same logic used by the woefully corrupt Nigerian politicians to truncate the previous effective administration "...who made Obasanjo Lord over us?" "...is he the only one that can deliver quality leadership?" Well, Nigerians now know better that they should have kept what worked instead of this major disappointment. Too late to go back now as more years are been wasted on mediocrity. I won't be surprised if "Prince Charles" of Africa is a politician that has been smarting to lay his sticky-palms on a juicy political job so he too can chop a little at the… [Read Full Text]
“Ignominy” in the eyes of whom? The west? Is that reason the people of Niger should not choose whether or not their leader stays or go. I guess whatever the West says to This Day columnist must be right, the same way they “gbaju e” by bluffing the gullible Nigerians to jettison the greatest leader we ever had in favor of this currently clueless, lazy-bone called “Servant Leader” that has now taken Nigeria back to the stone age (on the excuse that Nigeria will break up by 2015 if power do not go back to the same North that bankrupted… [Read Full Text]
African leaders have a cancerous obsession with power. When they manage to get in our they think they own the country, own the people, own the Central Bank, own all the currencies, own all the foreign exchange, own all the natural resources and can spend any amount of money on what they want, where they want and also employ all their families to hold key cabinet positions or create a new one for the wife. They dont think beyond how they came to power but like all the other morons cling to power and just would not go until forcefully… [Read Full Text]
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