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Nigerian Unrest Boosts Oil

Written by Luke Burgess
Posted February 20, 2006

Dear Wealth Daily Reader,

Luke Burgess here, writing from the comforts of my couch today as the U.S. market's are closed for in honor of President's day.

Although it's Monday, for me it seems like Sunday. That's because I have a raging headache, I smell like cigarettes, and I have the faint taste of alcohol on my breath.

Yes dear readers, the ole' Lukester is hungover.

Nearly once a month me and my buddies get together to play poker. These guys are an amalgamated posse of old college, work, and neighborhood comrades. They're a motley crew of heavy drinking, cigar smoking, foul mouths. And that's why I like them.

When we get together we do play for money. But I think the real draw is an excuse to get out of the house and down some beer. By the way, if you ever get the chance, you should try Tröegs HopBack Amber Ale, it's absolutely delicious.

Anyway, yesterday I hosted the monthly poker game at my house. We started at 1pm and didn't wrap it up til around 8pm or 9pm. And as you can imagine 7 or 8 hours of good hard drinking can really leave you a mess.

Now if you start drinking in the early afternoon, like I did yesterday, you basically miss the whole day. It's like you fell asleep for the whole day and can't remember a thing. You miss everything. So the next day you have to play catch up to find out everything that happened while you were all banged up.

Needless to say, that's what happened to me. And as far as my brain is concerned, yesterday never happened.

Well I slogged out of bed this morning and learned of a major attack on Nigerian oil. 19 percent of oil Nigerian oil supplies have been knocked out after rebels bombed oil pipelines and blew up a boat in a major tanker terminal.

Now I have to catch up on the story. Can't these guys wait til I'm sober to bomb something?

Oil Prices Leap Over $1.50 after Nigerian Attacks

Overnight, insurgents holding nine foreign hostages in southern Nigeria, destroyed an oil pipeline and blew up a Nigerian military boat, which served as a living quarters for Nigerian sailors while based in the region

The Movement for the Emancipation of the Niger Delta has claimed responsibility for the attack saying it attacked a Shell-operated oil pipeline switching station and a military houseboat in the oil-rich southern region.

Nigeria's biggest foreign operator Royal Dutch Shell was forced to close 340,000 barrels a day of output feeding its Forcados tanker platform and shut another 115,000 barrels daily by closing the offshore EA field as a precaution.

The militants say they want more control over the Niger Delta's vast oil wealth and have also threatened to blow up oil tankers.

The Nigerian government says the militant movement is a cover for thieves siphoning crude oil on a commercial scale from pipelines across the vast wetlands region of southern Nigeria.

The militants threatened to spread the violence further across the restive south. They also said they would kill Nigerian President Olusegun Obasanjo if he entered the region saying, "We are declaring a war on Obasanjo. We will attack and kill him should he venture into the Niger Delta for any reason."

With U.S. markets closed for the holiday, the focus was on London where brent crude futures climbed $1.47 a barrel to $61.36.

Continuing unrest in Nigeria as well as in Iran will make it difficult for OPEC to cut output when it next meets in March, despite evidence that world demand growth is slowing because of persistently high prices.

Nigeria is the fifth-largest importer to the United States, after Mexico, Venezuela, Canada and Saudi Arabia. Nearly half of Nigeria's oil exports go to the United States.


Luke Burgess
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