Crude advances in Asia on supply concerns
Singapore – Oil prices were higher in Asian trade Wednesday, buoyed by a shutdown of Britain’s largest oil field as talk of war pervaded the crude-producing Sudanese region, analysts said.
New York’s main contract, light sweet crude for delivery in June, was up 13 cents to $103.68 and Brent North Sea crude for June delivery gained nine cents to $118.25.
Crude supply disruptions in the North Sea and Sudanese region were keeping prices up, IG Markets Singapore said in a report.
“Tight supply is continuing to generate this bullish sentiment as it is proving difficult to get increased supplies into the markets to bring down prices,” the report stated.
A disruption to production in Britain’s largest oil field Buzzard, which is situated in the North Sea and normally produces 200,000 barrels of crude, led to the facility halting operations on Saturday.
The oil field, operated by Canadian company Nexen Inc. is expected to recommence production over the next few days, but traders were nevertheless capitalizing on the current shutdown.
The supply disruption comes as tensions between Sudan and South Sudan escalated another notch on Tuesday with talk of war.
South Sudan’s leader Salva Kiir on Tuesday said Sudan had “declared war” on his country after Khartoum warplanes allegedly bombed the South’s oil-rich border regions in overnight raids.
The comment follows Sudan President Omar al-Bashir’s strident threats to crush the “insect” government of the South, adding that the time for talks was over.
