Crude Oil Jumps After Rebel Attacks Cripple Nigerian Exports

Crude oil climbed the most in a month in London after rebel attacks in Nigeria cut output from Africa’s largest producer by 19 percent, reviving concern OPEC has little room to make up for a series of disruptions.

Brent crude oil for April settlement rose as much as $1.59, or 2.7 percent, to $61.48 a barrel, its highest since Feb. 9. It was up $1.41 at 1:36 p.m. on London’s ICE Futures exchange.

Royal Dutch Shell Plc stopped pumping 455,000 barrels a day in Nigeria, or 1.5 percent of OPEC’s output, after militants set fire to an export terminal and kidnapped nine foreign oil workers two days ago. The rebels today reported new assaults on a pipeline, threatening to spread their offensive to the entire Niger river delta. Nigeria pumps about 2.8 percent of the world’s oil.

“The fear with Nigeria is that you’ve got elections coming up next year and that’s leading to the possibility of an upsurge in violence,” said Michael Lewis, the head of commodities research at Deutsche Bank AG in London. The uprising isn’t “going to be a one- off event. The nature of this oil rally is changing from being demand-led to one led by supply, because there’s a lot of geopolitical risk in large producing countries.”

Bloomberg