Crude Oil Rises in New York on Threats of Attacks in Nigeria

By Angela Macdonald-Smith

Jan. 11 (Bloomberg) -- Crude oil rose for the first day in three in New York on heightened concern about the threat of attacks on facilities in Nigeria that may cut supplies from Africa's biggest producer.

The Movement for the Emancipation of the Niger Delta yesterday threatened fresh assaults after claiming it backed fighters that attacked oil vessels the previous day. Militant action has halted as much as 20 percent of the nation's crude production since early 2006.

``It looks as if Nigeria is warming up again,'' said Rowan Menzies, a commodity market analyst at Commodity Warrants Australia Pty in Sydney. ``The militants are angry their wealth is being taken away, and if oil has doubled in price in the last year maybe they're twice as angry.''

Crude oil for February delivery rose as much as 62 cents, or 0.7 percent, to $94.33 a barrel in after-hours electronic trading on the New York Mercantile Exchange. It was at $94.23 at 8:20 a.m. in Singapore.

Yesterday prices fell $1.96, or 2.1 percent, to $93.71 a barrel, falling below $94 for the first time in two weeks after Goldman Sachs Group Inc. said Japan is at risk of recession. Futures reached a record $100.09 a barrel on Jan. 3. Prices are up 82 percent from a year ago.

Brent crude for February settlement yesterday fell $2.15, or 2.3 percent, to $92.22 a barrel on London's ICE Futures Europe exchange, the lowest close since Dec. 20. Futures touched $98.50 on Jan. 3, the highest intraday price since trading began in 1988.

While a slowdown in economic growth could hurt demand, it could also spur investment in commodities as a hedge against inflation and a weak dollar, JPMorgan analyst Katherine Spector said in a report in which she raised her 2008 oil forecast by 12 percent to $76.50 a barrel.

``One lingering risk to our view is that investor allocations to commodities broadly and oil specifically could exceed expectations,'' Spector said in the Jan. 9 report.