Oil prices dip back below 50 dollars as tensions ease in Nigeria

PORT HARCOURT, Nigeria, Oct 4 (AFP) - Oil prices slid below the psychologically critical 50 dollar a barrel mark Monday as tensions eased in Nigeria's southern oil heartland, where a rebel group fighting for control of the country's key resource said it had surrendered its weapons.
The price of light sweet crude -- which is well suited to refining into petrol and of which Nigeria is one of the main suppliers to the US -- for November delivery fell 32 cents to 49.80 dollars a barrel in early trading on the New York Mercantile Exchange, down from Friday's record close of 50.12.
In London the price of reference Brent North Sea crude oil for delivery in November slipped 39 cents to 46.23 dollars in late afternoon deals.
"The main news is the Nigerian one," said Lee Elliott, a trader with GNI-Man Financial.
"There is a small resolution. A deal has been struck between the rebels and government representatives in Nigeria."
Threats by a rebel group in Nigeria's oil-rich southern delta region to wage all-out war against the government if their demands for greater autonomy were not met, and deadly clashes between rival gangs in the west African country's oil heartland had sparked concerns about supply from the west African country, which ships some 2.5 million barrels per day of crude.
But the two rebel groups fighting for control of oil resources in the Niger Delta region signed a government-brokered ceasefire and disarmament agreement on Friday after months of violence, which Amnesty International has said has claimed at least 500 lives.
And on Monday, the leader of one of the armed gangs, Ateke Tom, of the Niger Delta Vigilante (NDV), said his group had surrendered its arms to the government, in a move expected to reverberate on the oil market.
"We surrendered all the weapons in our possession to the Rivers State government long before the Abuja peace talks," Tom told AFP in his Okrika home town.
"We have disarmed. There is no more fighting. We are men of peace. In fact, we need the peace more than anybody," he said.
Ateke Tom said his group had also reached out to arch rival Mujahid Dokubo Asari, leader of the Niger Delta People's Volunteer Force (NDPVF).
Asari assured Tom Sunday that he was ready to keep the peace.
Asari had also threatened to go to war against the government of President Olusegun Obasanjo if his rebel group's demands for a bigger slice of Nigeria's oil wealth, greater autonomy for the Ijaw people, the majority ethnic group in the delta, and a national debate on Nigeria's problems were not met.
Nigeria is the world's sixth largest exporter of crude oil and Africa's biggest producer, with proved reserves of some 27 billion barrels.
The west African country derives more than 95 percent of its foreign exchange earnings from the sector, but despite its massive oil wealth, many of its more than 130 million people, particularly those in the delta, live on less than one dollar per day.
The government deployed troops to the region early last month to end gang violence in Port Harcourt, the hub of Nigeria's oil industry, and its surrounding villages.
Nigerian military officials said Monday they had ceased military operations in the area following the peace deal, but there were reports of fresh killings in one village.
"I would not say we have suspended operations, but we have been asked as you say in the military to observe a marking time or, simply put, hold-up action," Captain Onyeama Kanu, spokesman for the Joint Task Force (JTF) patrolling the Niger Delta region, told AFP in Port Harcourt, Nigeria's oil capital.
"What this implies is that we will remain where we are, but have to be vigilant as we continue to monitor the situation," he said.
The unrest, according to Amnesty International, claimed some 500 lives in one month alone, but the government said only 13 were killed.
But despite the cessation of hostilities by the two groups, military sources told AFP Monday of an outbreak of violence at the weekend in the Ijaw village of Ke, near Bille.
"A yet to be identified armed gang invaded the village and killed several people. The report was brought to our base but we could not act on it," a senior military officer, who asked not to be named, told AFP from the JTF base in Buguma, west of Port Harcourt.
The militia groups denied responsibility for the attack Monday, and police in Port Harcourt were unable to confirm it.
Market watchers have warned that prices could shoot higher again if the tentative truce in the Niger Delta breaks down.