Oil price hits two-year high amid Nigeria rig attack

8th November 2010, Comments 0 comments

Oil prices reached two-year high points on Monday before profit-taking pushed them down, while attention was on Nigeria after an oil rig was attacked off the coast of the energy exporting nation.

New York's main contract, light sweet crude for delivery in December, struck 87.49 dollars a barrel -- the highest point since late 2008.

It later pulled back to stand at 86.58 dollars, down 27 cents compared with Friday's close.

In London, Brent North Sea crude for December fell 36 cents to 87.75 dollars a barrel. Analysts said prices were still profiting from strong US employment figures.

"Better-than-expected US labour market data have created optimism among financial investors and this could revive the demand for oil in the US, the world's largest oil consumer," said Commerzbank analyst Carsten Fritsch.

On Friday, the US Labor Department reported a surprising 151,000 non-farm jobs were added in October, snapping a four-month streak of payroll losses and more than double the 60,000 forecast by most analysts.

Oil prices have been boosted in recent days by the US Federal Reserve's decision to inject an additional 600 billion dollars (423 billion euros) into the market to help stimulate the world's biggest economy.

On Monday meanwhile, an oil rig was attacked off Nigeria and five crew members are believed to have been taken hostage, said the company that oversees the installation.

The attack was in the Okoro field -- located about 12 kilometres (eight miles) off the coast off Nigeria's Akwa Ibom state. Afren is headquartered in Britain and works with a local partner, AMNI International.

Nigerian security officials could not immediately provide details on the attack, the latest to occur in the Niger Delta region, the heart of the country's oil industry.

In September, three French oil workers were kidnapped from their ship after an attack that led to a two-hour gun battle with authorities. A Thai national was also abducted.

Criminal gangs seeking ransom payments as well as militants claiming to be fighting for a fairer distribution of oil revenue have abducted scores of foreigners and family members of wealthy Nigerians in recent years.

An amnesty deal offered to militants last year greatly reduced unrest in the Niger Delta, but several incidents have occurred in recent months ahead of elections set to take place early next year.

Nigeria is one of the world's largest oil exporters, but the government has failed to provide adequate basic services, including sufficient electricity, with outages occurring daily.

© 2010 AFP

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