IPE Brent futures over half a dollar higher on Nigerian shut-in

London (Platts)--27Jul2006

IPE Brent futures in London traded over half a dollar higher on Thursday
after Nigeria's NNPC declared indefinite force majeure on Bonny Light exports
and after Shell announced that 180,000 b/d Bonny Light oil production was
still shut-in .
Bullish US Department of Energy inventory figures released Wednesday also
pushed prices higher, brokers said.
At 1200 London time (1100 GMT), September Brent was trading 47 cents
higher at $74.47/barrel. The prompt September/October spread strengthened
further to around -$10 with a shortage of North Sea oil forcing the forward
month above the September NYMEX light, sweet crude contract by around 19
cents.
On Wednesday, September Brent rose $1.73 from an inter-day low of
$73/barrel to a high of $74.73 before a bout of profit taking pushed the
contract 74 cents lower in 30 minutes.
On Wednesday, Nigeria's NNPC declared an indefinite force majeure on
Bonny Light crude exports after Royal Dutch Shell said Monday it had been
forced to shut in 180,000 b/d of Bonny Light production following a pipeline
rupture.
Shell Thursday said crude production in Nigeria was still shut following
a leak on pipeline feeding the 390,000 b/d Bonny export terminal. "I can say
that 180,000 b/d is still shut in and the force majeure is still in place," a
company spokeswoman said.
Weekly Department of Energy statistics released on Wednesday have also
provided support to this uptrend with bullish news on gasoline in particular,
brokers said.
There was an unexpected 3.2-million barrel draw in gasoline stocks with
strong refining cracks bolstering crude demand. Gasoline demand on a four-week
moving average was 1.8% above year-ago levels and distillate demand was 6.2%
above year-ago levels. August unleaded gasoline settled 1.13 cents higher at
$2.2962/gallon.
--Jonathan Davies, jonathan_davies@platts.com

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