TEHRAN (FNA) Oil was steady on Tuesday after new supply disruptions in Nigeria and US allegations about a naval conflict with Iran rekindled supply worries, offsetting growing talk of a US recession that would hurt oil demand.
US light crude for February delivery rose 5 cents to $94.25 a barrel by 0152 GMT after leaping $1.51 on Monday, snapping a three-day losing streak. The gains were also aided by a weakening dollar, which lifted the whole commodities sector.
“People realize that oil is going to be relatively tight despite the recession, despite the slowdown in OECD,” said Tony Nunan, manager at Mitsubishi Corp’s risk management unit, Reuters reported.
Royal Dutch Shell declared force majeure on crude shipments from its Forcados export terminal in Nigeria following sabotage to two pipelines last week.
The 380,000 barrel per day Forcados field, which was shut for almost two years by a string of militant attacks in February 2006, had partially resumed pumping in the middle of last year.
Militant raids since 2006 have knocked out a fifth of the country’s oil output capacity.
Similar fears of supply disruptions from Iran, the fourth largest crude oil exporter, rose again after US allegations about a naval conflict with Iran and after President George Bush continued its claims about Iran and urged Persian Gulf Arab states to confront the issue.
A weak dollar has also helped firm prices for commodities, with gold surging to record highs on Monday as investors fled to safer commodities on growing talk of a recession.
The dollar remained on Tuesday near seven-week lows against the euro and yen on concerns that some of the largest US banks will report weaker earnings this week, heightening expectations for more Federal Reserve interest rate cuts.
Fears of a US recession weigh heavily in the background, keeping prices below their record high $100.09 from January 3 and within a $90-$100 range since late October.
“Macro concerns have been setting the ceiling (for prices), while crude stockdraws, which have continued from the fourth quarter into early January, have been setting the floor,” analysts at Societe Generale wrote in a research note.
US crude stocks could start rebounding, with a Reuters poll of analysts forecasting weekly data from the US Energy Information Administration showing a 1.2 million barrel rise in crude inventories in the week to January 11.
Distillate stocks were seen building by 1.2 million barrels while gasoline stocks should rise by 2.5 million barrel.