Oil pushes higher in wake of Algeria attack

Crude-oil futures drifted back into positive territory finding underlying support following an attack by militants on a natural-gas field in Algeria that raised supply concerns.

In Europe, light, sweet crude for February delivery rose 40 cents, or 0.4%, to $94.64 a barrel in electronic trading. The trading was choppy, with the February contract earlier in negative territory.

The militants, with possible links to al Qaeda, seized about 40 foreign hostages including several Americans at a remote gas field in Algeria. An effort by Algerian security forces to storm the facility failed.

The attack leaves around 24 million cubic meters a day of gas and 60,000 barrels a day of liquids production offline, delivering another blow to Algeria’s stagnating gas industry.

February natural-gas futures rose 0.2% to $3.61 per million British thermal units.

West African oil exports to Asia to rise in January

West African crude oil exports to Asia will rise slightly in January versus December, according to data compiled by Reuters, with stronger demand from India offsetting a fall in exports to China.

Asia is expected to import 1.81 million barrels per day (bpd) of West African crude in January versus 1.75 million in December, with China importing 33 cargoes and India 18, according to data based on movements seen by oil traders.

Strong economic growth in China and other emerging economies has driven a rapid increase in demand for crude oil in Asia, where imports of West African crude oil rise sharply since 2007.
West African crude oil is typically "sweet", meaning it contains low levels of corrosive sulphur compounds, and it meets Asian demand for heavy industrial fuel oil and distillates such as kerosene.
Nigerian and Angolan oil exports are now competing with new U.S. domestic production of sweet crudes from shale formations in Texas and North Dakota, which have exerted downward pressure on prices of high quality oil.
The U.S. Energy Information Administration, the independent statistical arm of the Department of Energy, said that U.S. crude oil production would grow by 900,000 barrels per day in 2013 to 7.3 million bpd. The increase in shale production so far has cut U.S. imports of West African crude by over 1 million bpd, which has further increased the leading role played by Asian buyers in the market.
In total for 2012, refiners in China, India, Indonesia and other Asian countries bought more than 660 West African crude oil cargoes this year, carrying a record 1.72 million bpd. This was up from just under 600 cargoes in 2011 and compares with 656 cargoes in 2010, the previous record year.