MEND attacks fail to prevent price falls

26/05/2009

Crude, heating oil and other distillate prices moved downwards this morning (May 26th) despite the confirmation of reports that the Movement for the Emancipation of the Niger Delta (MEND) has carried out a number of attacks on oil and gas pipelines in the country.

In a statement yesterday, the rebel group said they had effectively shut down a facility owned by Chevron by carrying out attacks on the pipelines that feed the storage base.

Chevron confirmed the attacks and announced: "To protect the environment, the incident has led to the shut in of approximately 100,000 barrels of oil per day production from [Chevron's] swamp operations in Delta State."

Despite this substantial reduction in output capacity, oil prices failed to make headway on the New York Mercantile Exchange, with the pervasive sentiment being that demand for crude and distillates such as heating oil is still dangerously weak.

With this latest reduction in output, total production in Nigeria has now fallen below the one-million-barrels-a-day mark.