Crude Pushes Higher
May 19th, 2009 | By Doug Casey | Category: Oil Investment & Alternative EnergyIn the energy market on Monday, crude for June delivery surged, closing at $59.03/barrel, up $2.69. June reformulated gasoline gained 7.75 cents, to $1.7581/gallon.
Traders responded both to the upbeat housing report and to concerns that militant unrest in Nigeria may disrupt supplies from Africa’s biggest oil producer. There have been a couple of ominous developments in recent days.
First, a pipeline supplying the Nigerian Gas Company in the Niger Delta’s Abiteye community was blown up Saturday, apparently in retaliation for army action that destroyed a militant camp and rescued a crew hijacked by local militants. Chevron (NYSE:CVX) has oil and gas facilities in Abiteye.
Then the Movement for the Emancipation of the Niger Delta, Nigeria’s main militant group, said yesterday it would put in place blockades on key waterways in the Niger Delta to try to prevent crude exports.
These apparently outweighed continuing weak demand.
As Hussein Allidina, an analyst at Morgan Stanley, wrote, the fundamentals in the oil market “have been weak and are getting weaker … Equally apparent, however, is that the fundamentals have had very little impact on crude oil’s recent price action.”
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