Oil up to $137 on Nigeria outage, Goldman

LONDON- Oil steadied on Thursday, supported by a further production outage in Nigeria and as a top U.S. investment bank raised its oil price forecast.



By (Reuters)

Published: Thu 19 Jun 2008, 7:26 PM

Last updated: Sun 5 Apr 2015, 1:11 PM

Royal Dutch Shell stopped production at its Bonga offshore oilfield in Nigeria, which pumps an average of around 220,000 barrels per day, after an armed attack, a spokesman said on Thursday.

"Not good news. That's why prices are rising this morning," a trader said.

U.S. crude rose 32 cents to $137.00 a barrel by 0915 GMT, reversing a 88-cents fall earlier in the day.

It was trading 55 cents higher at $136.99.

London's Brent crude was trading 9 cents higher at $136.53.

Nigeria is already producing about 20 percent below its potential, contributing to the rally in oil prices to a record high near $140 earlier in the week.

Its output has suffered from a violent campaign of sabotage by militants in its southern Niger Delta, the heartland of its oil industry.

U.S. top investment bank Goldman Sachs raised its oil price forecasts further on continued supply tightness.

Oil would average $117 a barrel this year, compared with its previous estimate of $108, and price would average $140 next year, Goldman Sachs said.

The gains were limited ahead of a meeting of oil producing and consuming nations in Jeddah on June 22, called by Saudi Arabia.

The White House said on Wednesday it was not expecting Saudi Arabia to announce an output increase in Jeddah

However, some investors said the world's top oil producer would reassure it was willing to increase output to bring down prices.

"We may not see much long-side accumulation prior to such an important event," MF Global said in its research note.

"We believe that the Saudis will strongly indicate that they will release more oil onto the markets."


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