Oil above $130 a barrel has tumbled down the global market

Singapore -The steady decline in the oil prices in Asia that started three days ago has come to an end following an output cut in Nigeria.  The oil price climbed back to more than $130 a barrel.  

Damaged pipeline

Eni SpA reported shut down of pipelines that carried more than 47,000 barrels of oil every day due to a sudden drop of pressure.  This caused decrease in oil production.  One of the Nigerian military official said that an Eni pipeline has been damaged due to an explosion.  The incident happened in the country’s oil rich south on Thursday.  However, the severity of the damage is still not known.  

Col. Chris Musa, the head of the Bayelsa State Military, told The Associated Press that although he can confirm that there was an explosion but he cannot confirm if it was a mere accident or the pipeline was vandalized.   Eni said in a statement that repair work has already started to ensure that every thing comes to place in quick time.  

Nigeria’s major militant group, i.e. the Movement for the Emancipation the Tiger Delta, denied to have any type of involvement in the pipeline blast.  

In the past two years, the attacks on the oil industry infrastructure of the region have reduced the oil output in Nigeria by almost a quarter of the total oil produced.  The instability in the oil production of Africa’s top crude producer has caused the crude prices to reach historic highs.  

Rising price of crude along with comments from Ben Bernanke, US Federal Reserve Chairman, about the significant changes in the US economy has stoked expectation from the fact that demand of oil can be efficiently reduced by slowing down the economic activity.  

Pervan said that he expects the price of crude oil to average $135 a barrel in the third quarter and almost $125 per barrel in the fourth quarter.     
 
In other Nymex trade, 0.62 cent rise was observed in heating oils taking the price to $3.75 a gallon (3.8 liters) where as gasoline prices rose 2.62 cent making it $3.1895 per gallon.  Also, natural gas futures saw a rise of 4.7 cents making the price per liter to be $10.584 per 1000 cubic feet.