Oil prices rise on supply concerns
Nigeria, the Organisation of Petroleum Exporting Countries’ sixth-biggest producer, is set to cut output by 142,000 barrels a day under agreements reached in 2006.
Occidental Petroleum, the fourth-biggest US oil company, said 120,000 barrels a day of output has been lost after a fire at its Elk Hills field in California. It’s the seventh-largest field on the US mainland.
“There’s some disagreement about the size of the cut but it’s clear that some barrels will be taken off the market,” said Tom Bentz, an oil broker with BNP Paribas.
Crude oil for March delivery rose 18 cents, or 0.3%, to $59.89 a barrel on the New York Mercantile Exchange.
Futures touched $60.80, the highest intraday price since January 3. Prices are 1.5% higher this week and 4.4% lower than a year ago.
News reports from Dow Jones and other organisations said Nigeria was planning to cut as much as 300,000 barrels a day.
“What we’re going to do is what OPEC has asked us to do,” Levi Ajuonuma, spokesman for Nigerian National Petroleum, said.
“Nothing more.”
OPEC pledged to cut 500,000 barrels of oil a day from supplies starting this month, on top of a 1.2 million barrel-a-day reduction on November 1.
“There have been a number of stories that demonstrate that oil supplies aren’t to be taken for granted,” said Tim Evans, an energy analyst at Citigroup Global Markets in New York. “The Occidental field was shut down yesterday, the Hibernia field in Canada is also shut, there are problems with the Cantarell field and Norwegian production is declining.”
Mild weather in December and early January helped push New York futures to $49.90 a barrel on January 18, the lowest since May 25, 2005. The arrival of colder weather has helped drive prices higher this month.
Crude oil may fall next week on speculation US fuel stockpiles are sufficient to meet heating demand.
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