Crude prices linger at new highs amid supply concerns

Singapore (Platts)--12Oct2004

Concerns over possible supply disruptions from a general strike in OPEC member
Nigeria, coupled with slow recovery of US Gulf production shut-in by Hurricane
Ivan and an industrial dispute in oil exporter Norway ahead of the peak winter
demand season sustained crude at its all-time highs in Asia Tuesday. 

US
benchmark light sweet grade West Texas Intermediate for November delivery was
trading in a tight range either side of its record NYMEX close of $53.63/bbl
on the electronic Access platform at 0700 GMT Tuesday, as fresh supply fears
on account of the Nigerian and Norwegian labor woes continued to loom large on
the market. A general strike in Nigeria to protest a recent 25% rise in fuel
prices at the pump entered its second day Tuesday. Though oil majors with
upstream operations in the country have so far reported no impact on their
crude production or exports, the market is expected to keep a nervous watch on
events in Nigeria over the four-day strike until Oct 14. The country pumps
about 2.4-mil b/d crude.

In Norway, an expansion of a three-month strike by the Norwegian Oil Workers
Union took another 25,000 b/d of offshore crude production offline over the
weekend, in addition to the 30,000 b/d it has already curtailed. The Norway
and Nigeria factors have compounded ongoing production losses in the US Gulf
of Mexico, where close to 28% of the 1.7-mil b/d of production remains
shut-in. 

Also in the USG, the Louisiana Offshore Oil Port was dealing with a
fresh round of offloading delays in the wake of Tropical Storm Matthew, which
had forced the port to halt its marine operations for almost three days, a
spokesman said Monday. Although crude tanker offloadings at the port, which
handles about 1-mil b/d of imports, resumed on Sunday, a backlog of ships
waiting to berth promised continued delays. "I think it's a bull trend and
with the Nigerian strike, people are still cautious to sell," said a trader in
Asia. "Nigeria has sweet crude, the crude everybody seeks, but this is a minor
problem...the Ivan mess is still the most important problem," he added.

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