Shell : oil production in Nigeria completely shut down due to MEND rebel attacks

Shell has suspended its operations in the Western Niger Delta, giving in to increasing pressure from MEND rebels in the region. Shell confirmed the closure of its oil plants in the region following a spike in attacks on its facilities and employees. Vice-President of Shell's Exploration and Production Africa Markus Droll said that insurgency in the Niger Delta had resulted in a massive loss of oil revenues. "As I speak here, we have zero production in our western operations in the delta. We have completely closed down after the most recent attack in Forcados (western Niger Delta) on Monday."

The Movement for the Emancipation of the Niger Delta (MEND) has recently stepped up assaults on Shell's oil pipelines. MEND eyes a bigger share in the country's energy sales income and has vowed to continue abductions and attacks on foreign energy companies. Attacks on oil facilities have crippled Nigeria's oil production capacities in recent months, lowering the country's oil production by 500,000 barrels per day.

- The MEND rebels actually did it this time, managing to shut down all of Shell's oil production output in Nigeria. NYMEX crude oil prices have been twitching above and below the $70 level in recent days, being tossed about by the usual conflicting brew of push/pull factors. Going into America's 4th of July holiday celebration season, the typical expectation was that oil prices would be slightly weaker due to lower volume, but this latest piece of news just might shake things up a little bit.

$70 oil is starting to look like a bit of a battleground in the past month or so. Line drawn in the sand and all that. You could say the same of the US dollar, with USDX 80 also being repeatedly tested over the past month. If you are looking at the live oil prices in trading hours, watch for further confirmation or repudiation of the Golden Cross, which is the 50-/200-dma crossover that traders and trading programs alike are bound to be fixated upon. Seeing how it bounced off the 50-dma back in Apr 2009, it's probably as good a support as any, of course unless it breaks it. Currently, the 200-dma for NYMEX crude oil is at $57.48, and the 50-dma is at $63.37.

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