NEW YORK (Dow Jones)--Crude oil futures leaped above $99 a barrel Tuesday after a Nigerian militant group stirred fears of more disruption to supply from Africa's largest oil producing nation.
Light, sweet crude for March delivery was recently up $3.70, or 3.9%, at $99.20 a barrel on the New York Mercantile Exchange. The March contract expires Wednesday. The more actively traded April Nymex contract was trading at $98.97 a barrel, up $3.52.
April Brent crude on the ICE futures exchange was trading $2.98 higher at $97.89 a barrel.
A person claiming to be a spokesman for the Movement for the Emancipation of the Niger Delta said that Henry Okah, believed to be the group's top leader, had been killed by gunfire in Nigeria.
The purported spokesman, Jomo Gbomo, said in an email to Dow Jones Newswires that the group is giving the government 24 hours to clarify reports of Okah's injuries.
"Failure to do this will bring bloodbath in that region and beyond," the spokesperson said. "We will not take prisoners from the military or oil workers."
Instability in Nigeria has been a critical factor underlying crude's run back toward $100 a barrel in recent weeks. More than 500,000 barrels a day of Nigerian oil production has been halted amid security concerns, leading the country to produce about 2.07 million barrels a day in January, according to the International Energy Agency.
MEND initiated its campaign of kidnapping expatriate workers and sabotaging oil installations about two years ago. Last week, Okah was extradited to Nigeria from Angola.
Oil was trading higher before MEND's message, fueled by investment funds' return soaring energy markets and a refinery explosion in Big Spring, Texas, on Monday.
Investors also see the Federal Reserve's interest rate cuts keeping the U.S. economy on solid footing for the time being, temporarily allaying fears of a collapse in oil demand, said Phil Flynn, an analyst at Alaron Trading Corp. in Chicago.
"Throw in a couple refinery explosions and geopolitical problems, and all the sudden you've got a buying frenzy," he said.
Royal Dutch Shell PLC (RDSA) earlier said it has restarted between 150,000 and 200,000 barrels a day of crude output from its Forcados export terminal in southern Nigeria had little immediate effect on oil prices.
Last month, Shell declared a force majeure on exports from Forcados for the rest of January and February after pipeline sabotage.
Front-month March reformulated gasoline blendstock, or RBOB, was recently up 10.90 cents, or 4.4% to $2.6028 a gallon. March heating oil rose 9.66 cents, or 3.7%, to $2.7435 a gallon.
Source: Gregory Meyer, Dow Jones Newswires; 201-938-4377; greg.meyer@dowjones.com