If Nigerian government does not move fast to halt the destruction of pipelines and oil facilities in the Niger Delta by the Niger Delta Avengers, the country’s output may drop drastically as the militants were said to have hatched a plan to get deadlier in their attacks this week.
The Avengers, according to sources in the creeks, have in the last 48 hours made several late night shuttles between Delta State and Bayelsa State. According to the source each time they make such mid-night movement, what follows is usually a strike.
“In the last 48 hours, there has have been frequent late night movement in the waterways. This is the time the Avengers switch base in readiness for an attack. The villagers here live in fear. The government should act fast and stop the bombings of pipelines. It is not only the economy that will be hurt, the lives of the shoreline dwellers are at high risk’, our source said.
The Nigerian government has deployed military to the creeks but this has done little to impair the might of the Avengers who have continued to hit hard at oil facilities. Their action in recent weeks has pushed global oil prices to a record $50, the highest price this year which may go up on more damage from the Avengers.
Ironically Nigeria, Africa’s largest exporter of crude, is not profiting from the increase as its output has drastically dropped.
Oil prices rallied for a third straight session last Wednesday to new 2016 highs above US$50 a barrel on relentless sabotage of oil supplies in Nigeria and ahead of US crude inventory data likely to show draws.
May crude oil imports in China at their highest in more than six years also boosted prices as it fed hopes that energy demand was stabilizing in the No. 2 economy and also the world’s second-largest oil consumer.
The dollar’s drop to 5-week lows on waning expectations for an imminent U.S. rate hike also added to interest in greenback-denominated oil from holders of the euro and other currencies.
Brent crude futures rose US$1 to US$52.44 a barrel by 9:45 a.m. EDT (9:45 pm Singapore time), after reaching US$52.47, their highest level since October.
US crude’s West Texas Intermediate (WTI) futures were up 88 cents at US$51.24 a barrel, after rallying to US$51.27, their highest since last July.
“The trend is your friend and picking tops can be painful as all of the money out there chasing trends from the systematic side of the market can overwhelm,” said Scott Shelton, broker at ICAP in Durham, North Carolina. “That seems to be happening here and being driven by Nigeria outages and trade buying as they pull barrels from inventory.”
