Reuters: Oil edges up on Nigeria and Iran supply concerns: “Oil prices edged up on Monday as traders feared further disruption to supplies from Nigeria and remained concerned over a standoff on Iran's nuclear ambitions.”: Monday 16 January 2006

Monday 16 January 2006

SINGAPORE, Jan 16 (Reuters) - Oil prices edged up on Monday as traders feared further disruption to supplies from Nigeria and remained concerned over a standoff on Iran's nuclear ambitions.

London Brent crude <LCOc1> for February gained 19 cents to $62.45 a barrel by 0508 GMT, after slipping 36 cents on Friday. U.S. light crude in New York was closed for a national holiday, after ending at $63.92 on Friday.

Brent prices have risen nearly 6 percent since the start of the year as geopolitical jitters and speculative buying outweighs rising fuel supplies in the United States.

"Further disruptions in Nigeria could be possible, and Iran's nuclear programme is providing underlying support," said Hiroyuki Kitakata of Barclays Capital in Tokyo.

Royal Dutch Shell (RDSa.L: Quote, Profile, Research) is considering a total staff pullout from the west of Nigeria's delta region on Monday due to militant attacks, an industry source said, threatening more supply cuts from the world's eight-largest exporter.

The company said it began evacuating workers from four oil production platforms after an armed attack on Sunday, which did not affect production but would delay repairs to a nearby 100,000-barrel-per-day (bpd) crude export pipeline bombed last week.

A resumption of nuclear research by Iran, the world's fourth-largest crude exporter, has sparked a flurry of Western diplomacy in pursuit of a referral to the United Nations Security Council for possible sanctions.

The United States and European Union hope to enlist Russian and Chinese support for robust diplomatic steps against Iran when the Security Council powers meet on Monday.

Blanket sanctions such as an oil embargo are deemed highly unlikely, but the OPEC giant has said any crackdown could drive up world oil prices.

If Iran uses its oil exports as a retaliatory political weapon and ceases exports of around 2.4 million bpd, the rest of the world's spare capacity would struggle to cover the deficit, especially with mounting tensions in Nigeria.

Oil output policy in fellow OPEC producer Kuwait is expected to be maintained after the death on Sunday of its ruler Emir Sheikh Jaber al-Ahmed al-Sabah.  

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