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Worries about Nigeria drive up oil prices
Crude futures climbed on Wednesday as a possible strike by Nigerian oil workers loomed and petroleum output in the Gulf of Mexico continued to suffer more than two weeks after Hurricane Ivan whipped through the region.
A government report that showed domestic oil supplies grew for the second week in a row provided little comfort to energy traders, and that same report pointed to a weekly decline in the nation's heating oil inventory according to Agency France Presse report.
Light crude for November delivery rose 46 cents to $51.55 in midday trade on the New York Mercantile Exchange. On Tuesday, oil futures settled at $51.09 a barrel, a record high on the exchange.
While oil prices are nearly 70 per cent higher than a year ago, when adjusted for inflation, they remain about $29 below the peak reached in 1981.
Still, the runup has been a boon to the stock prices of oil companies. Shares of Exxon Mobil Corp., the largest integrated petroleum company, are up 30 per cent from a year ago, trading 49 cents higher at $49.81 Wednesday on the New York Stock Exchange. The stock price of Anadarko Petroleum Corp., an independent oil and natural gas producer, is up nearly 60 percent from a year ago at $68.63, rising 51 cents on the NYSE.
Feeding oil's rise Wednesday, Nigeria's main oil workers' union said it would join a national strike, set to begin next week, unless the government agreed to talks on rising fuel prices. Nigeria, which produces more than two million barrels of crude daily, is the world's seventh-largest oil exporter.
Hours later, the Energy Department reported that commercially available inventories of crude grew by 1.1 million barrels to 274 million barrels. That follows an increase of 3.4 million barrels in the prior week, but still leaves inventories four per cent below year ago levels, a shortfall that has traders worried as global supplies remain tight and colder months approach.
�Unfortunately, the build in supplies doesn't appear to be enough to break the back of $50 oil," said John Kilduff, senior oil analyst at Fimat USA in New York.
Moreover, the country's supply of distillate fuel, which includes heating oil, diesel and jet fuel, shrank by 2.1 million barrels last week to 123.4 million barrels, according to the government report. That's 6 percent below year ago levels and comes as the United States and the rest of the Northern Hemisphere prepare for winter, when demand rises for home heating fuels such as natural gas and heating oil.
The PUNCH, Thursday, October 7, 2004,
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