Oil prices extend gains on Algeria unrest

17th January 2013, Comments 0 comments

Oil prices rose further on Thursday, with crude supported by unrest in north Africa following an attack by Islamist militants on an Algerian gas field and amid fighting in neighbouring Mali, analysts said.

Brent North Sea crude for delivery in March climbed 73 cents to $110.41 a barrel in late London trading.

New York's main contract, light sweet crude for February gained $1.05 to $95.29 a barrel.

"The latest news of the attacks put a geopolitical risk premium into pricing" of energy, said Victor Shum, an analyst at research group IHS Purvin and Gertz.

Algerian troops launched an air and ground assault Thursday on a gas complex besieged by Islamists, killing nearly 50, most of them hostages, the kidnappers said as they threatened to kill their remaining captives.

There was no official word from Algiers, but Britain, France and Norway confirmed an operation was underway at the remote desert site near the Libyan border, attacked Wednesday in retaliation for a week-old military campaign against Islamist rebels in neighbouring Mali.

"Warplanes and ground units have begun an operation to take the complex by force," one of the kidnappers told Mauritanian news agency ANI, threatening to "kill all the hostages if the Algerian forces succeed in entering the complex."

The kidnappers claimed an army air strike killed 34 hostages and 15 Islamists. A foreign diplomat in Algiers confirmed that the rescue mission "did not go too well for the hostages," adding that the operations were ongoing late afternoon.

The gas field, located close to the Libyan border, is jointly operated by British oil giant BP, Norway's Statoil and state-run Algerian energy firm Sonatrach.

Prices were being supported also by indications of improving US crude demand. A report by the US Energy Administration on Wednesday said American oil stockpiles dropped by one million barrels in the week to January 11.

Analysts had forecast a build of 2.1 million barrels.


© 2013 AFP

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