Oil supplies tighten, pushing prices higher for third time in four sessions

CRUDE oil rose for the third time in four sessions as war in Iraq and civil strife in Nigeria limit shipments from the countries, which normally produce about 6% of the world’s oil.

US and British military forces are meeting resistance in southern and central Iraq as they move to topple the regime of Saddam Hussein. Iraq may resume oil exports within three months, British Air Marshal Brian Burridge said.

In Nigeria, a production shutdown by Royal Dutch/Shell Group and other companies entered a 10th day.

“The war may take longer than expected,’ said Tom Bentz, an oil broker at BNP Paribas Commodity Futures Inc. in New York.

“At the same time Nigeria’s exports are being delayed. Supplies are tight and the problems in Iraq and Nigeria will keep them that way.” Crude oil for May was up $1.07, or 3.7%, at $29.70 a barrel as of 10:18am on the New York Mercantile Exchange. Oil is up 15% from a year ago.

In London, the May Brent crude-oil futures contract was up $1.03, or 4.1%, at $26.32 a barrel on the International Petroleum Exchange.

Iraq’s main Persian Gulf oil port, Mina al-Bakr, which can export about 1 million barrels a day, is closed, said US Navy Lieutenant Garrett Kasper, a spokesman for the Fifth Fleet. In February, Iraq pumped 2.48 million barrels a day, according to Bloomberg estimates.

Iraqi oil is flowing through a pipeline to the Mediterranean Sea port of Ceyhan, Turkey, at a time when exports are stopped, meaning storage tanks there may be full in a week, the Turkish pipeline operator Botas said.

Shell, ChevronTexaco and Total Fina Elf SA have cut output in Niger Delta by 817,500 barrels, or 37% of Nigeria’s production last month.I saw villagers who had clashed with government troops have agreed to halt the violence, Reuters reported yesterday, citing a state government spokesman.

Nigerian oil workers who fled the unrest won’t return to work until they are confident a cease-fire will hold.