Oil Rises on Concern Attacks May Cut Nigeria Production Further
Feb. 24 (Bloomberg) -- Crude oil rose after rebels threatened for the second time in a week to attack the oil industry of Nigeria, Africa's largest producer.
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``Fears of disruption in Nigeria, lower production from Iraq and potential losses of supply from Iran mean the industry wants to hold higher inventories,'' said Julian Lee, an analyst at the Centre for Global Energy Studies, a London consulting company. ``Nigerian oil is valuable in terms of quality and location.''
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Still, less gasoline accumulated than expected, slowing the pace of growth of the previous seven weeks and raising concern supplies may be strained in summer as demand increases. Gasoline stockpiles reached their highest since 1999 the week ended Feb. 17.
``The relatively high inventory levels are providing some cushion to the market, but of course demand is rising in the U.S.,'' said Francisco Blanch, a senior oil strategist with Merrill Lynch & Co. in London. ``Sure, there is a cushion and we are in a more comfortable situation than a few months ago, but the structural problems this market has haven't gone away.''
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