Crude oil prices rise further to a 10-year high . . .Nigeria poised to supply more

www.vanguardngr.com By Hector Igbikiowubo with agency report Monday, March 03, 2003

OIL  prices soared, sky-rocketing up to almost $40 per barrel in New York for the first time since the 1990-91 Gulf war as anxieties grew about a looming war in Iraq and depleted US oil stock levels. Nigeria has also indicated its willingness to supply more crude oil should the need arise, with  industry operators saying that it can conveniently feed the market with three million barrels per day.

At weekend the price of benchmark Brent, North Sea crude oil for April delivery stood at 33.10 dollars a barrel from 32.28 dollars a week earlier.

In New York, April-dated light sweet crude futures traded at 37.20 dollars from 35.45 dollars the previous week..

Traders chased prices higher on fears that a war in Iraq could be just around the corner, threatening disruption to Middle East supplies while US oil stocks are close to a 27-year low.

“A potentially supply-disruptive war may begin at any moment,” said Mike Fitzpatrick, oil trader at Fimat USA in New York.

Traders were fretting about the possible loss of Iraq oil while stocks of US crude oil and heating fuels are already reaching alarmingly low levels, analysts said.

“Crude-oil inventories remain about as low as they possibly can be in the States and then you throw in on top of that the geopolitical concerns and you’ve got the recipe for crude moving up towards 40 dollars,” said JP Morgan analyst Paul Horsnell.

“In terms of the key oil products, we’re just running out,” he added.

Analysts said that the decision taken last month by the Organisation of Petroleum Exporting Countries (OPEC) to pump more oil to compensate for a strike in Venezuela had come too late to quell a price spike.

And the market took little comfort from Saddam Hussein’s pledge not to torch his country’s oilfields if attacked, or Saudi Arabia’s insistence that it could pump an extra 2.5 million barrels of crude oil a day if a Gulf war interrupted Iraq’s exports.

Nigerian oil industry operators have also given indication of their willingness to supply more crude oil to the international market to augment whatever short fall that may arise from supply glitches resulting from a possible US-led attack on Iraq.

Energy This Week gathered that although the Federal Government had late last year put the nation’s crude oil producibility at between 2.7 and 2.8 million barrels per day, presently, the nation has achieved a producibility level of 3 million barrels per day.

The operators pointed out that Shell’s EA field has since come on stream, adding about 150,000 barrels per day to the nation’s output, while Mobil’s Yoho also came on stream recently, adding 90,000 barrels per day to the nation’s output.