Price for oil likely to soar

Oil prices are expected to jump when the U.S. markets open for business today due to a series of attacks against the oil industry in Nigeria.

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Dan Pickering, a longtime energy analyst and principal with Houston’s Pickering Energy Partners, noted on Monday that the oil companies are taking the situation seriously, reducing or shutting in activity in the region for the short term. The latest disruption comes in an already tight market, where losing any amount of oil production on the margin makes a difference.

“This is different than OPEC talking about a supply reduction,” he said. “This is a physical supply reduction and tends to have a more immediate impact. And this is also one of the reasons that oil has traded with a sort of fear premium over the last 18 months — because any issue like this Nigeria issue has the potential to even further tighten the market.”

Chron