Oil prices slip as Nigeria gangs agree ceasefire

NEW YORK (AFP) - The oil price in New York slipped below 50 dollars a barrel as rival gangs in the oil-rich Niger Delta signed a ceasefire, but other worries kept the market tense.
New York's light sweet, crude contract for November delivery eased 21 cents to 49.91 dollars a barrel. On Friday, the price had settled above 50 dollars for the first time.
In London the price of Brent North Sea crude oil for delivery in November fell 43 cents to 46.19 a barrel.
"The Nigeria premium was taken out of the market," said Jim Ritterbusch, analyst at Ritterbusch and Associates.
But "there are still a lot of uncertainties," he said.
With producers straining to meet global demand for oil, the market is vulnerable to even modest supply shocks.
Prices fell after two rebel groups fighting for control of oil resources in the Niger Delta region signed a government-brokered ceasefire and disarmament agreement late on Friday after months of violence.
"The main news is the Nigerian one," said Lee Elliott, a trader with GNI-Man Financial in London.
"There is a small resolution. A deal has been struck between the rebels and government representatives in Nigeria."
Nigerian military officials on Monday announced a halt to operations in the delta.
The leader of the Niger Delta People's Volunteer Force (NDPVF), Mujahid Dokubo Asari, assured his arch rival, Niger Delta Vigilantes chief Ateke Tom, on Sunday that he was ready to keep the peace.
Ateke said Monday his group had surrendered its arms to the government.
"We have disarmed. There is no more fighting. We are men of peace," he said in his hometown of Okrika.
Oil prices had hit record peaks of 50.47 dollars in New York and 46.80 dollars in London on Tuesday of last week after the NDPVF threatened war in the delta and urged oil multinationals to leave.
Nigeria is the world's sixth-largest exporter of crude oil and Africa's biggest producer, with proved reserves of some 27 billion barrels.
Its light, sweet, low-sulphur crude is particularly well suited for refining into petrol, or gasoline.
Even if oil keeps flowing from Nigeria, the low levels of US crude oil and heating-fuel inventories going into the northern hemisphere means that prices are expected to remain high in the coming weeks, analysts said.
"Despite prices coming down this morning, there is still support for (US) crude prices at 50 dollars a barrel and above," said Barclays Capital analyst Kevin Norrish in London.
Kuwait's energy minister said the emirate would pump up to 200,000 more barrels of crude a day later this month.
Kuwait is currently producing to its maximum capacity of 2.5 million barrels per day (bpd), but "we will have an additional output of between 180,000 and 200,000 bpd" once Gathering Center 15 returns to operation later in October, Sheikh Ahmad Fahd al-Sabah told reporters in Kuwait.
The Organization of Petroleum Exporting Countries agreed in Vienna last month to raise its official production ceiling by one million bpd to 27 million bpd from November 1 to bring it nearly in line with actual output.
Kuwait's daily production quota was raised to 2.167 million bpd.