Oil prices rise after Nigeria pipeline attack

Oil prices rise after Nigeria pipeline attack

Friday April 25, 10:41 am ET
By Robert Barr, Associated Press Writer AP
Oil prices rise above $116 a barrel on supply worries after Nigeria pipeline attack

LONDON (AP) -- Oil prices rose Friday, largely reversing an earlier $2 a barrel drop, after a militant group behind recent attacks in Nigeria's southern oil region said it had sabotaged another pipeline and a strike hit Exxon Mobil production in Africa's biggest exporter.

Light, sweet crude for June delivery climbed $1.89 to $117.95 a barrel in electronic trading on the New York Mercantile Exchange by midday in Europe. Before news of the pipeline attack, it had fallen as low as $114.51 a barrel.

The contract had dropped $2.24 in the previous session to settle at $116.06 a barrel.

In Nigeria, the Movement for the Emancipation of the Niger Delta, or MEND, said Friday that its fighters hit a pipeline late Thursday in southern Rivers State. That brought to four the number of pipelines the group has attacked in the past week.

MEND said in a statement that the pipeline attacked Thursday belongs to a Royal Dutch Shell PLC joint venture. A Shell spokesman had no immediate comment.

White-collar workers at Exxon Mobil Corp. -- one of the largest producers in Nigeria, with an output of about 2 million barrels a day of crude oil -- have "commenced a safe and orderly shut-in of production" to push for more pay, the company said in a statement.

Brent crude futures rose $1.41 to $115.75 a barrel on the ICE Futures exchange in London.

Gasoline prices rose 3.14 cents to $2.9895 a gallon on the Nymex, while heating oil futures rose 2.57 cents to $3.2840 a gallon. Natural gas futures rose 11.5 cent to $10.905 per 1,000 cubic feet.

Oil seemed poised to hit $120 a barrel this week but stalled in its march there on Thursday after the dollar gained against the euro. The dollar benefited from speculation that the Federal Reserve is growing concerned about inflation and may not cut interest rates as much as once thought.

Higher U.S. interest rates tend to stabilize or strengthen the dollar, and investors see commodities such as oil as a less effective hedge against inflation when the dollar is stronger. A higher dollar also makes oil more expensive to investors overseas.

Associated Press writer Edward Harris in Lagos, Nigeria, contributed to this report.