Strikes and Rebel Actions Cut Nigerian Crude Output By Nearly 50%, Record Hikes Almost Certain, Price Relief Unlikley In 2008

DOI 28 April 2008

REUTERS (LONDON) - Exxon Mobil has shut nearly all its Nigerian oil production, totaling around 770,000 barrels per day (bpd), due to a workers' strike. This represents nearly 40 % of total Nigerian output, and comes after a series of attacks this month by militants in the Niger Delta which has shut-in an additional 169,000 bpd from Royal Dutch Shell (8% Nigerian output). These problems in Nigeria, the world's eighth-biggest oil exporter, helped push oil prices to a record high near $120 a barrel on Monday. SOURCE: http://africa.reuters.com/currencies/news/usnBAN843223.html

Analysis: Problems in the Niger Delta are a long way from being resolved, and labour and rebel groups seem to hold the initiative. The consensus from the International Energy Forum meeting in Rome on 20 April 2008 was that tight supply conditions (and hence inflationary pressures on most world economies) would persist for the remainder of 2008. (Analytic Confidence: 8)