Oil prices rise on Algerian hostage drama
The country is the No. 4 crude oil producer in Africa. Traders worry about supply issues and political instability in the region.
Oil prices hit a four-month high Thursday, propped up by bullish U.S. economic data and worries about supply amid the hostage drama in Algeria.According to Bloomberg News, oil futures for February delivery climbed as high as $95.43 on the New York Mercantile Exchange, the highest intra-day price since Sept. 19. Traders were reacting to better-than-expected housing start data and last week's drop in applications for unemployment benefits, which was the lowest since January 2008, the news service says.
Traders are also worried about political instability in Algeria following reports that six foreign hostages and eight of their captors were killed in a botched rescue attempt at a remote gas plant. Other reports say 50 hostages managed to escape. Some hostages continue to be held by gunmen aligned with Mokhtar Belmokhtar, a senior commander of al-Qaeda in the Islamic Maghreb until late last year, according to the BBC.
According to the U.S. Energy Information Administration, Algeria was was the fourth-largest crude oil producer in Africa in 2010 after Nigeria, Angola, and Libya. Anadarko (APC), BP (BP) and ConocoPhilips (COP) are among the foreign firms with investments in the country. The country also is a leading producer of natural gas.
Of course, the last thing the fragile economic recovery needs is a huge spike in oil prices.
--Jonathan Berr does not own shares of the listed stocks. Follow him on Twitter @jdberr
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SO IN OTHER WORDS:
FRANCE ATTACKS AL QAEDA IN NORTHERN MALI . IN RESPONSE, AL QAEDA ATTACKS ALGERIAN BP GAS PLANT WHICH HAD PRODUCED 160,000 BARRELS A DAY. A BOTCHED RESCUE ATTEMPT AT THAT PLANT KILLED 6 FOREIGN HOSTAGES AND 8 CAPTORS. THIS HAS CAUSED POLITICAL INSTABILITY IN ALGERIA DRIVING BARRELS OF OIL TO 95.43 (THE HIGHEST SINCE SEPT. OF 2012). THEREFORE MAKING THE US ANTICIPATE HIGHER GAS PRICES.
"The country is the No. 4 oil producer in the world. Traders worry about supply issues and political instability in the region."
And what exactly does this have to do with oil prices at this point in time?? Reports came out a few weeks ago stating the the U.S. supplies were up, well above average for this time of year. The rest of the world also is well-supplied due to low demand, i.e., crappy economy. What happened to 'supply and demand'?? The traders, oil producers, and refineries are screwing us, end of story.
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