Nigeria sabotage push up oil prices

Brent crude oil prices rose on Monday, lifted by a plunge in the dollar that could spur demand just as attacks on Nigerian oil infrastructure tighten supplies, but signs of recovering U.S. output capped gains.

Brent crude futures LCOc1 were up 63 cents at $50.27 a barrel at 0941 GMT (05:41 a.m. EDT). U.S. crude futures CLc1 were up 60 cents at $49.22 a barrel.

Traders said oil prices rose on a sharp fall in the dollar .DXY on Friday after weak U.S. jobs data sparked concerns over the state of the world's biggest economy, cutting expectations of a near-term cut in U.S. interest rates.

A weaker dollar supports fuel demand in the rest of the world as it makes dollar-traded oil imports cheaper.

Traders will be watching Fed Chair Janet Yellen's speech at 1630 GMT (12:30 p.m EDT) on Monday for hints of a potential rate move.

"Futures have been trading in a small range for the last 10 days. If we want to see any more upward movement then we need to see strength from products...but so far the gasoline crack has been capped," said Olivier Jakob, oil analyst at Petromatrix in Switzerland.

The Muslim holy month of Ramadan starts on Monday and is seen as supportive of prices as driving demand picks up in most Muslim-dominated countries.

Traders said prices were also propped up by attacks on oil infrastructure in Nigeria, which has already sent the country's output to more than 20-year lows.

So far, supply cuts like those in Nigeria or Libya, have been met by rising output in the Middle East, especially Iran, which has ramped up output since the end of international sanctions against it in January.

But Iran is returning to international oil markets more quickly than expected and is quickly returning to its maximum capacity.

This means that further disruptions in global supplies might not be compensated by rising Iranian output.

Oil's price rally, however, was capped on signs of increased output in the United States where energy firms this week added rigs drilling for oil for the second time this year, energy services company Baker Hughes Inc (BHI.N) said on Friday.

Rising prices have encouraged producers to cautiously increase activity. Drillers added nine oil rigs in the week to June 3, raising the rig count to 325 but still well below the 642 at work a year earlier, Baker Hughes said.

"While not enough to materially change the outlook for U.S. production ... there are some early signs that rigs may be returning in the best acreage, namely the Permian Basin," Morgan Stanley said.

U.S. crude oil production has fallen by 5.4 percent since January and by almost 10 percent since mid-2015 to 8.74 million barrels per day.

Reuters

Video - Aliko Dangote building world's largest oil refinery in Nigeria

Nigeria is Africa's top oil producer, yet it's in the middle of a fuel crisis. The missing link: oil refineries. To address this massive disconnect, billionaire businessman Aliko Dangote is building an oil refinery right outside Lagos.

Related stories: Video - Africa's richest man Alike Dangote contributes $10m to victims of Boko Haram

Video - Aljazeera speaks with Africa's richest man Aliko Dangote

Video - Nigeria's revenue dip on low global oil prices

CCTV's Sophia Adengo now tells us how Nigeria's heavy dependence on petroleum exports for revenue has seen a ripple effect in the economy.

Video - President Buhari cancels visit to troubled oil producing Niger Delta

Nigeria has begun cleaning up decades of oil pollution in the Niger Delta region despite a last minute cancellation by the president to launch the exercise. No reasons were given for the cancellation. The Avengers militant group had however threatened oil companies with bloody attacks ahead of the planned visit by the President. He was represented by Vice President, Yemi Osinbajo.

Nigerian Mohammed Barkindo appointed Opec secretary-general

The Opec oil cartel said on Thursday that it had appointed Nigeria’s Mohammed Barkindo as its new secretary-general.

Barkindo, former head of Nigerian National Petroleum, will replace Libyan Abdalla El-Badri who has held the position since 2007.

El-Badri was due to step down in 2012, but has stayed in place because Opec has been unable to agree on a successor. Other candidates were Ali Rodriguez Araque, previously secretary-general in 2001-2002, and Mahendra Siregar of Indonesia.

"We’ve finally selected the secretary-general, which is good. He’s highly respected and qualified," said Saudi Arabian Energy Minister Khaled al-Falih.

Mohammed Barkindo, who was acting head of Opec in 2006, met ministers from Algeria, the United Arab Emirates (UAE), Kuwait, Venezuela, and Saudi Arabia in Vienna this week to garner support for his candidacy, according to a person familiar with the matter, who asked not to be identified because the talks were private.

Indonesia’s Siregar — a former deputy finance minister described by UAE Oil MinisterSuhail Al Mazrouei as the only other credible candidate for the post — did not make a public appearance in Vienna on Wednesday.

Angola, the only other member of Opec in sub-Saharan African, supported Barkindo, Minister of Petroleum José Maria Botelho de Vasconcelos told reporters on Wednesday.

The Nigerian candidate also met with Iraq and Iran prior to Thursday’s Opec meeting, according to a person familiar with the matter.

El-Badri was originally due to step down in 2012, after serving the maximum two terms permitted by Opec’s regulations.

Squabbling members were not able to agree on a replacement, as political rivals Saudi Arabia, Iran and Iraq blocked each other’s applicants, and El-Badri’s tenure was extended at successive meetings.

At Opec’s last meeting in December, the feud over the group’s role in managing oil markets spilled over into the selection of its most senior official.

Venezuela, Algeria, Iran and Ecuador — frustrated at their inability to press Saudi Arabia into cutting production — insisted that El-Badri’s term should not be extended another year. A compromise was reached, with the extension limited to July, and his title modified to acting secretary-general.

If no unanimous decision is reached to choose a new secretary-general, the position "shall be appointed on a rotational basis for a term of two years", according to article 28 of Opec’s statute.

This is what happened for much of the decade before El-Badri’s appointment, with the position filled by representatives from countries holding Opec’s presidency — a largely ceremonial role that is transferred alphabetically between members.

Barkindo spent more than 23 years at Nigerian National Petroleum, where he served in various capacities including deputy MD of Nigeria LNG, head of the international trading unit and manager of the state-run company’s London office. He also served for 15 years as Nigeria’s national representative to Opec. In January 2009, he was appointed group MD of Nigerian National Petroleum, only to be removed from the post a little more than a year later by then-president Goodluck Jonathan.

BDLive