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.

By Jonathan Berr Jan 17, 2013 12:56PM
Image: Oil drums (Kevin Phillips/Digital Vision/age fotostock)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
 

More on Money Now



36Comments
Jan 17, 2013 1:34PM
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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.

Jan 17, 2013 1:32PM
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Another reason to raise oil prices.....  what a joke.....  The can find any reason to rape us more.  Why not, the economy sucks, unemployment is high, why not take more.
Jan 17, 2013 1:28PM
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fruuuk the traders this sheeeet has got to stop we have to oil off the commodities market god damit every time i read this sheeet it makes me puke

 

Jan 17, 2013 1:22PM
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Headline should read: Oil price rises on banks buying oil futures with free government money.
Jan 17, 2013 1:22PM
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Wasn't there another story on here earlier about how the US will be the largest oil producer in the world in 2013, and Saudi Arabi has cut back production because of global over-supply?  So how can a hostage drama in one "remote gas plant", as the story puts it, effect oil futures?  Oh yeah, because we're all being played.
Jan 17, 2013 1:20PM
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Lower unemployment claims won't translate into higher demand for petroleum. Labor participation rate is only 1 tenth of 1 percent above the all time low set in July and payrolls have not increased, people are losing their benefits. Also take home pay of those working is less as of January 1st. This move is all based on irrational fear about supply that at present is outpacing demand by a wide margin.
Jan 17, 2013 1:17PM
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Stop buying there oil. They can drink it and eat sand.
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