This won't bring oil prices down

Oil prices may be down a bit today from their record levels, but here comes a factor that could push them back up — not just today but for weeks to come.

Militants from Nigeria's oil-rich Delta have called off a voluntary ceasefire, promising a fresh campaign of violence and kidnappings of oil workers.

In a statement e-mailed to reporters on Sunday, the Movement for the Emancipation of the Niger Delta said attacks would recommence from midnight.

Mend announced a voluntary truce after the May inauguration of President Umaru Yar'Adua, but says talks have failed.

Previous attacks on oil installations have slashed ouput of Nigerian crude.

Mend's main demand is for the Delta region to control its oil resources and pay tax to the federal government, but the line between ideological struggle and crime is blurred.

The Mend statement said: " There will be no forewarning of these attacks but a statement will follow soon after."

MEND is declaring an end to the cease-fire because one of its leaders has been arrested in Angola — something MEND says was orchestrated by the Nigerian government.

Oil output from Nigeria fell a good 20% as a result of MEND's attacks late last year and early this.  Nigeria is the fifth-ranking U.S. oil supplier, although given the unreliability of Chavez in Venezuela, it might be fourth, depending on the day.

The Daily Reckoning