Oil rises on supply fears

Feb 28 | Updated: Feb 29 2008, 05:08am hrs
Crude oil rose on reports of a further production loss in Nigeria and that a technical fault is blocking shipments from northern Iraq.

Nigeria's Brass River crude production was cut following a militant attack on February 24, according to four traders of West African crude who declined to be identified.

Flows from Kirkuk in northern Iraq may remain interrupted until tomorrow after a glitch at a pumping station, Reuters reported.

"Geopolitics have driven financial speculators back into the market," said Andy Sommer, an analyst with HSH Nordbank in Hamburg. "If there really has been a new attack in Nigeria that could lead to a surge in prices."

Crude oil for April delivery rose as much as 54 cents, or 0.5%, to $100.18 a barrel on the New York Mercantile Exchange, trading for $100 at 12:42 pm London time at 11:56 am London time.

Earlier, the contract declined as much as 73 cents, or 0.7%, to $98.91 a barrel. On Wednesday, the contract fell $1.24, or 1.2%, to settle at $99.64 a barrel after advancing to $102.08, the highest since trading began in 1983.

Brent crude for April settlement traded at $98.64 a barrel, up 37 cents, at 12:43 pm London time.

Nigeria, Africa's biggest exporter, lost as much as a fifth of its production due to militant violence since last February.

Bloomberg