Crude futures hit fresh record highs on Monday amid concerns of supply disruptions in Nigeria, where rebels are threatening an uprising in the oil-producing region.
The latest ethnic unrest in Nigeria comes as oil markets are already concerned about supply issues in Iraq and Russia.
"While such periodic unrest has become somewhat common, the disturbance comes atop already heightened concerns about supply availability headed towards the northern hemisphere winter," said Michael Rothman, chief energy strategist at Merrill Lynch.
Royal Dutch/Shell Group said it had shut up to 40,000 barrels per day of oil production for security reasons. Shell last week evacuated 235 staff from two oilfields as government troops launched raids on nearby communities to track down militants.
Shell's output loss follows a 10 per cent drop in Nigerian output last month. Edmund Daukoru, presidential adviser on petroleum, told Reuters that Nigeria had reduced supply to base capacity of 2.25m b/d. Nigeria had been pumping at full capacity of 2.5m b/d until July to take advantage of record high oil prices, but analysts said the output surge took a heavy toll on ageing oil infrastructure.
Posted by bushmeister0 at 1:27 PM EDT