Oil rose above $65 a barrel on Monday after assailants broke into an oil well in Nigeria, reminding investors of the risk to supply from the world’s eighth largest exporter.

“Nigeria is still very much on top of the list in terms of risk,” said Olivier Jakob, oil analyst at Petromatrix. “The market is going to stay very edgy on Nigerian news.”

U.S. crude was up 37 cents at $65.31.

London Brent, now more representative of the global market than U.S. oil, was up 72 cents at $70.14 by 1218 GMT having earlier risen to $70.29.

Sources at private security firms had earlier reported an attack on a Total oil facility in Nigeria using high explosives. Total said no explosives were used.

Violence has surged in Africa’s top oil producer since February 2006, cutting a third of Nigeria’s output and forcing thousands of expatriates to evacuate the volatile region.

Monday’s intra-day high stands in the way of a further advance for Brent, based on the use of past price moves to predict the market’s future direction, traders said.

“Technically, we have to break through $70.30,” said Rob Laughlin, an oil broker at Man Financial. “I think the market will probably have another test to the upside.”
Iran

Prices also drew support from Iran, the world’s fourth largest oil exporter, pressing ahead with its atomic work.

A senior Iranian official said on Saturday the country has started building its first domestically made atomic power plant — a move which could deepen a standoff over Iran’s nuclear program.

The West fears Iran’s atomic work is aimed at making weapons. Tehran says it only wants to produce electricity.

“In the next decade Iran will be one of the most talked-about countries in the world regarding domestic nuclear energy,” Mohammad Saeedi of Iran’s Atomic Energy Organization was quoted as saying by the ISNA news agency.

Monday’s break-in in Nigeria followed further abductions at the weekend, which have dampened hopes of getting shut Nigerian oil — valued for its gasoline content — back to world markets.

Two Indian employees of a petrochemical firm were kidnapped by gunmen in Port Harcourt, police said on Sunday. The militants had initially taken 10 workers from the residence but soldiers rescued some of them.

Despite the prolonged Nigerian outage, oil ministers from the Organization of the Petroleum Exporting Countries were satisfied that demand for crude oil was being met.

“The market is very well supplied, in fact it is oversupplied,” OPEC President Mohammed al-Hamli, who is also oil minister for the United Arab Emirates, told Reuters on Monday.

OPEC is due to meet on Sept. 11 to chart output policy.

source news : money.cnn.com

Find More Mining News :