• Home
• /
• Business

Oil climbs above $67 after Nigeria poll

LONDON - Brent oil climbed above $67 on Monday after Nigeria’s elections drew condemnation from monitors and investors waited for fresh word on oil supplies from the world’s eighth biggest exporter.

Olivier Jakob of oil consultancy Petromatrix said it was too early to judge the impact of Saturday’s poll on the oil industry. An upsurge in violence could cut deeper into output. Increased stability could lead to the return of lost production.

‘We need to see how the situation evolves this week with the major opposition groups,’ he said.

London’s Brent crude, currently seen as a better guide to world oil prices than US crude, was up 62 cents at $67.11 a barrel by 1041 GMT, building on Friday’s 55 cents gain.

US crude was up 27 cents at $64.38.

Militant attacks have shut about a fifth of Nigeria’s oil production. Energy Minister Edmund Daukoru said last week he expected the country’s biggest foreign operator, Royal Dutch Shell, to restart its Forcados fields in May.

Ruling party candidate Umaru Yar’Adua looked set to win Nigeria’s presidential poll, early results showed, but monitors condemned the vote as a setback for democracy.

‘If there is widespread popular disenchantment with the elections that raises the possibility that the violence and sabotage specifically directed against the oil industry might continue,’ said Mike Wittner of Calyon investment bank.

‘The general view out there had been that once the elections were over and done with things would start to settle down and production would start to come back onstream.’

‘It raises some question marks that now challenge that assumption. It’s supportive for price, for sure.’

International and local observers said the ballot for the first handover of power from one civilian leader to another in the vast oil-producer was deeply compromised by ballot-stuffing, violence and a shortage of millions of voting papers.

About 500,000 barrels per day of Nigerian oil output has been shut down for over a year due to attacks on oil installations and at least 50 people died in violence surrounding Nigerian state polls earlier this month.

Analysts also said tight gasoline supplies in the United States ahead of the summer driving season, when motor fuel demand peaks, presented an upside risk.

An extended stretch of low production from US refiners has cut stocks by 13 percent since early February, with last week’s data showing a tenth consecutive weekly decline.