8 May 2007 - 16:34
  • News Code: 104147

LONDON - Oil prices rose Tuesday on fears of supply disruptions following the bombing of three major oil pipelines by the main militant group in southern Nigeria.

"Fighters of the Movement for the Emancipation of the Niger Delta attacked and destroyed three major pipelines ... We will continue indefinitely with attacks on all pipelines, platforms and support vessels," the group said in an e-mail.

 

Chief Joshua Benemesia, the head of a government-backed anti-piracy force, said he had confirmed the attack with members of the Bayelsa State volunteers who were stationed in the two areas attacked, Brass and Akassa.

 

Light, sweet crude for June delivery added 12 cents to US$61.59 a barrel in electronic trading on the New York Mercantile Exchange by midday in Europe. The contract fell 46 cents a barrel to settle at US$61.47 on Monday.

 

Brent crude for June delivery gained 41 cents to US$ 64.85 a barrel on the ICE Futures exchange in London.

 

"The reported attacks are raising the issue of violence and unrest in Nigeria - if it is true it would affect the exports out of Nigeria," said Victor Shum, an energy analyst with Purvin & Gertz in Singapore.

 

"The geopolitical issue of Nigeria has always been in the background and since the recent presidential election was flawed there has been concern in the market of whether there would be more violence," he said.

 

Eni SpA confirmed that two pipelines had been attacked. Eni"s subsidiary Agip operates the Brass export terminal, which exports 200,000 barrels of crude per day.

 

A bombing by the group, known as MEND, in December 2005 knocked out nearly a quarter of production in Africa"s largest oil exporter which has still not been restored. The militant group also recently claimed responsibility for the kidnapping of six foreign oil workers last week.

 

The market has also been awaiting the release of a midweek U.S. government report expected to show an increase in domestic gasoline inventories.

 

Analysts surveyed by Dow Jones Newswires expected gasoline stocks to rise by 370,000 barrels last week, on average, in a weekly report to be released Wednesday by the U.S. Energy Department.

 

An increase in gasoline stocks, which would be the first in 13 consecutive weeks, could help assuage supply concerns ahead of the peak demand summer driving season, which begins at the Memorial Day holiday weekend at the end of May. Unplanned outages and scheduled maintenance at refineries, sluggish imports and strong demand have plagued gasoline supplies.

 

There have been at least a dozen additional partial shutdowns in the U.S. and internationally that cut refining capacity.

 

Heating oil futures rose 1.12 cent to US$1.8141 a gallon while natural gas prices dropped 5.9 cents to US$7.720 per 1,000 cubic feet.

 

PIN/AP

News Code 104147

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