By Martin Ayankola with agency report
Tuesday, 5 Apr 2011
Chairman of INEC, Prof. Attahiru Jega
Oil prices rose above $120 a barrel on Monday due to geopolitical risks, including the postponed elections in Nigeria.
Nigeria’s 2011 budget is benchmarked against an oil price of $65 per barrel, meaning that the country is currently having a surplus of $55 per barrel.
The National Assembly elections, which were originally scheduled for Saturday, April 2, 2011, were initially postponed to Monday by the Independent National Electoral Commission, but pressure from stakeholders, including the political parties, forced the electoral body to again shift it to Saturday, April 9.
As a consequence, the presidential, state houses of assembly and governorship elections have been rescheduled to now hold on April 16 and 26 respectively.
Reuters reported that Libya’s continuing conflict and unrest in Yemen could also pose threats to oil supply in the Middle East, keeping the Brent well supported, with Brent benchmark Forties cargo delays and Nigeria’s election delay, adding to its strength.
An analyst at PFGBest Research in Chicago, Mr. Phil Flynn, was quoted as saying, “Brent is up on Libya, Yemen unrest and the Nigerian election.
“United States’ crude is hesitant because there is still worry that the Federal Reserve may be nearing a rate hike or tighter policy, which will lower liquidity and demand and strengthen the dollar.”
Brent crude price for May rose by $1.58 to $120.28 a barrel by 11.57am on Monday, just off its $120.63 peak, which was the highest since August 2008.
Brent has recovered after falling below $108 in the aftermath of Japan’s March 11 earthquake and tsunami.
US crude trading was choppy after posting a two-and-a-half-year high above $108 a barrel ahead of the open outcry trading session in New York.
Analysts and brokers said that a possible US Federal Reserve shift to tighter monetary policy after recent strong jobs report and other economic data limited US price gains. They added that the Brent market remained well supported by its proximity and the more immediate impact of the Middle East and Libya supply threats.
US crude rose by 14 cents at $108.08, off its earlier $108.78 peak and the highest intraday price since September 2008.
US crude trading volumes remained thin on Monday, after the previous two weeks saw the lowest weekly volumes for 2011.
Total US crude volume was just over 248,000 lots, 67 per cent below the 30-day average, with Brent trading above 248,000 lots, but also below average.
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