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Disruptions In Oil Supply May Extend Price Rise
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But supplies are still important, oil experts say. Adam Sieminski, chief oil economist at Deutsche Bank, said declines in oil output in the United States and Europe and a slowdown in the growth of oil production in Russia were making it hard for world supplies to keep pace with rising consumption.
He said that even with the stagnant oil consumption in industrialized nations, world oil consumption would grow about 1.2 million barrels a day. And even with increased oil output in some nations, he predicted "rising dependence" on the Organization of the Petroleum Exporting Countries.
One of those OPEC countries is Nigeria, which produces a high-quality crude oil especially well-suited for U.S. refineries that produce large amounts of gasoline. Production in Nigeria has been growing from offshore oil fields, but militants continue to cripple much of the output that used to flow from wells in the sprawling Niger River delta.
Shell's share of the suspended production during the first quarter was 156,000 barrels a day, the company's chief financial officer, Peter Voser, said in a conference call last week. That rose to 164,000 barrels a day before the attacks over the weekend. Based on Shell's share of overall production, Voser's estimate suggests that Nigeria's exports are at least 550,000 barrels a day less than the country's capacity.
Attacks over the past couple of years had targeted operations in the western part of the delta, and Voser said Shell was restoring some of those facilities when MEND launched attacks in the eastern part of the delta early this year.
Although one of its fighters died, MEND, a loose umbrella of groups, dismissed the Nigerian military gunboats and soldiers guarding the installation as "mere ornaments." The group's e-mail said, however, that it was "seriously considering" a temporary ceasefire appeal by presidential candidate Sen. Barack Obama (D-Ill.).
A senior foreign policy adviser to Obama said he had not commented recently on the situation in the Niger delta, though he had urged an end to the violence.
