Brent Oil Closes Near $50 as Nigeria Output Rises Despite Strifeby
Delta Avengers claim five attacks in blow to cease-fire
Nigeria raises oil output 90,000 barrels a day in June
Brent crude closed near $50 a barrel as Nigerian output rose last month following repairs to some infrastructure that had been damaged by militant attacks.
Brent fell 0.5 percent, paring earlier gains. The African country pumped an average 1.53 million barrels a day last month, an increase of about 90,000 a day from May, according to a Bloomberg survey. The global benchmark rose earlier as the Niger Delta Avengers said they attacked five crude-pumping facilities overnight Sunday. Nigerian oil workers plan to begin a strike July 7 to protest job losses and delays in passing a new oil law.
“There is not much volume and the news out of Nigeria is far from decisive,” said Thomas Finlon, director of Energy Analytics Group LLC in Wellington, Florida. “The markets are pretty much just waiting.”
Brent for September settlement lost 25 cents to $50.10 a barrel on the London-based ICE Futures Europe exchange. The contract had advanced 64 cents to $50.35 a barrel on Friday.
West Texas Intermediate for August delivery fell 23 cents, or 0.5 percent, to $48.76 a barrel on the New York Mercantile Exchange. Total volume of WTI futures traded Monday -- Independence Day in the U.S. -- was about 80 percent below the 100-day average. There was no settlement because of the holiday.
Nigeria was able to repair pipelines following a cease-fire agreement with rebels in the Niger River Delta, Emmanuel Kachikwu, Nigeria’s state minister for petroleum resources, said on June 27.
The targets of the Niger Delta Avengers Sunday attack included Chevron Corp.’s oil wells 7 and 8 and three trunk lines belonging to Nigerian Petroleum Development Corp., according to tweets from an account claiming to represent the militants. Attacks this year helped to cut Nigeria’s monthly oil output to about 1.45 million barrels a day in May, the lowest since 1989, according to Bloomberg data.
Crude prices have risen this year, with Brent gaining about 80 percent from a 12-year low in January, amid supply disruptions and falling U.S. output. Pledges from central banks halted a rout in global markets following the U.K. decision to leave the European Union. Both the International Energy Agency and Organization of Petroleum Exporting Countries forecast that supply and demand are returning to balance.
Shale drillers in the U.S. have brought back the most oil rigs of any week this year amid expectations of a stabilizing market. Rigs targeting crude rose by 11 to 341, Baker Hughes Inc. said on its website Friday, marking the fourth time in the past five weeks that producers have deployed more equipment. Explorers in the Permian Basin of West Texas, the nation’s busiest oil patch, led the increase.
More oil-market news:
- Rival leaders of Libya’s National Oil Corp. reached an agreement to unify the state company under a single management, a step that could help end the conflict over who can control the divided country’s crude exports and revenue.
- Russian oil exports are on course for a record this year, intensifying competition in Europe as Iran boosts shipments to the region. Exports rose 4.9 percent to 5.55 million barrels a day in the first half of the year from the same period in 2015.