A Review of the Nigerian Energy Industry

Oil rises to near $103 over Nigeria strike, Iran tensions

10 January 2012, Sweetcrude, ABUJA – Oil prices rose to nearly $103 a barrel Tuesday amid concerns about tensions between the West and Iran, a national strike which could affect oil production in Nigeria, and growing investor optimism that the U.S. economy is improving, which would boost crude demand.

By midday in Europe, benchmark crude for February delivery was up $1.54 to $102.85 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell 25 cents to $101.31 in New York on Monday.

In London, Brent crude was up 97 cents at $113.42 a barrel on the ICE Futures exchange.

Oil prices have hovered above $100 this month as signs of a strengthening U.S. economy bolster investor confidence.

Traders will be closely watching fourth-quarter corporate earnings reports, which began Monday, along with the latest data on retail sales, jobless claims and consumer sentiment later this week. The Dow Jones industrial average rose 0.3 percent Monday.

“Oil feels like a market that wants to head lower but is being precluded by a steady tone to equities, particularly within the U.S.,” where good economic news continues, energy analyst Ritterbusch and Associates said in a report.

Tension between Iran and Western powers over Iran’s nuclear programme also has helped keep crude above $100. The U.S. has recently enacted new sanctions targeting Iran’s central bank and its ability to sell petroleum abroad, and Europe is planning to restrict oil imports from Iran.

Iran has threatened to close the key Strait of Hormuz at the mouth of the Persian Gulf if the country’s oil exports are undermined by U.S. or European sanctions.

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