• Home
• /
• Business

Oil rises to $100 on Nigeria supply cut

Output at Nigeria’s Brass River crude oil stream had been cut by between 50,000 barrels per day and 80,000 bpd, traders said, but added that Brass River oil loadings were not affected. Italian oil firm ENI, operator of Brass River, had no immediate comment.

U.S. crude rose 46 cents to $100.10 a barrel by 1225 GMT, having hit a record high of $102.08 on Wednesday. London Brent crude gained 55 cents to $98.82.

The setback at Brass River comes on top of about 515,000 bpd of supply shut-in Nigeria largely because of militant attacks and sabotage.

Earlier, prices fell as bulging stockpiles in the United States added to concern over its slowing economy. U.S. crude stocks rose last week for a seventh week, a government report showed on Wednesday.

“In terms of fundamentals, it’s hard to justify the ferocity of the market’s rally,” said Robert Laughlin of MF Global. “The weakness in the U.S. economy is now affecting demand.”

Expectations that the Organization of the Petroleum Exporting Countries will not raise production at its meeting on March 5 limited oil’s decline, as did winter fuel demand in the United States and Europe.

OPEC’s president, Chakib Khelil of Algeria, said on Tuesday members would not raise output, in part because of concern about a demand slowdown.

Oil remained within a few dollars of the inflation-adjusted peak of $102.53 reached in 1980 and was supported by the weak U.S. dollar, which was trading near an all-time low against the euro.

Analysts who use past price movements to predict future direction said a move a few dollars higher for U.S. crude, also known as WTI, could lead to further gains.

“With the dollar in freefall, we would be concerned that if WTI rallies above $102-$103 it would trigger a further surge towards $110-$115,” Barclays Capital technical analysts said in a report.

“For the time being, we are hopeful that $102-$103 will continue to cap and dip back towards $99, or even $97, before a more important test of the upside occurs.”

Investors have pumped cash into commodities in recent weeks, seeking a hedge against inflation and betting on signs the U.S. Federal Reserve will keep cutting rates to prop up the economy.

Some other commodities also took a breather on Thursday. Platinum, which hit a record high last week, fell more than 2 percent and copper slipped from a 21-month high.