LONDON March 24 —
Oil prices surged Monday on market fears the Iraq war might take
longer than some anticipated and because ethnic unrest was
disrupting supplies from Nigeria.
Stiffening resistance to the U.S.-led invasion of Iraq has
undercut hopes for a brief war and an early rehabilitation of that
country's oil industry. Iraq pumped 2.5 million barrels a day before
fighting began and typically exported about 80 percent of that, or 2
million barrels.
May contracts of North Sea Brent, Europe's benchmark crude,
jumped $1.39 a barrel to $25.74 in afternoon trading in London.
Contracts of U.S. light, sweet crude for May delivery were trading
$1.24 higher at $28.15 a barrel in New York.
Fighting around burning oil wells in southern Iraq's Rumeila
field has driven out civilian oil-fire specialists working to quell
the blazes, the top firefighter said. U.S.-led forces previously
believed the field's facilities were secure.
"It's not nearly as safe as they said it was," Brian Krause, vice
president and senior blowout specialist for Houston-based Boots and
Coots, said Monday in Kuwait. "We're kind of sitting ducks out
there."
Coalition forces have made a priority of securing Iraqi oil
installations to prevent sabotage by Iraqis.
Confusion persisted over the extent of any Iraqi plans to damage
or destroy southern oil facilities. British military sources said
last week that almost all Iraqi oil facilities were mined or
booby-trapped, indicating that Saddam Hussein was prepared to blow
up his entire economy.
The Iraqi newspaper Al-Thawrah said on its Web site Sunday that
was a lie.
"What is burning in that area is no more than artificial trenches
filled with oil to be used as obvious methods of defense," the paper
said.
Iraqis sometimes have ignited oil in trenches to create thick
smoke to confuse their attackers.
U.S. Brig. Gen. Vince Brooks said Saturday that only nine wells
in southern Iraq had been sabotaged. Iraq has 1,685 producing
wells.
"I don't think that the Iraqis ever really intended to blow these
wells up and keep them burning forever," said Rob Laughlin, managing
director of London brokerage GNI Man Financial.
Still, he blamed fears of an "elongating" war for causing much of
the market's jitters.
Another cause for market concern was social unrest in Nigeria
that has forced oil companies there to suspend at least 40 percent
of the country's production.
Shell Development Petroleum Co., a unit of Royal Dutch/Shell in
Nigeria, has shut down 370,000 barrels a day in crude output after
evacuating facilities in the oil-rich Niger River delta, company
spokeswoman Kate Hill said Monday.
ChevronTexaco on Sunday evacuated staff and shut practically all
of its installations in the area, suspending production of 440,000
barrels a day.
The Niger delta has suffered civil unrest between rival ethnic
Ijaw and Itsekiri communities ahead of April's parliamentary and
presidential elections. Nigeria, which normally pumps about 2
million barrels a day, now has lost more than 800,000 barrels in
daily production due to weeks of fighting.
photo credit
and caption:
A U.S. military convoy passes
burning oil pipelines heading toward Baghdad, near the
southern Iraqi city of Basra, Saturday, March 22, 2003.
American and British troops encountered little resistance as
they seized Iraq's only port city Umm Qasr and moved to secure
oil fields. (AP Photo/Laurent
Rebours)
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