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Oil weaker in Asia as Nigeria strike ends

Oil weaker in Asia as Nigeria strike ends
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First Published: Mon, Jun 25 2007. 12 20 PM IST
Updated: Mon, Jun 25 2007. 12 20 PM IST
AFP
Singapore: Oil prices weakened in Asian trade on 25 June after labour unions in Nigeria, Africa’s largest oil producer, ended a four-day general strike, dealers said.
At 2:10pm (0610 GMT), New York’s main contract, light sweet crude for August, was down 49 cents to $68.65 a barrel from $69.14 in late US trades on 22 June.
Brent North Sea crude for August delivery eased 50 cents to $70.68.
Nigerian labour unions called off their strike on 23 June following an accord with the government that there would be no further increases in the price of fuel at the pumps for a year.
While the strike has been called off, long-term concerns over the stability of Nigeria’s oil sector remain, dealers said.
“It might ease things a little bit but more generally, the strike itself has highlighted the risk around Nigerian (oil) production a bit more,” said Gerard Burg, an energy and minerals economist with National Australia Bank in Melbourne.
“There has been no let up in the civil violence there and it continues to disrupt production ... I think production generally remains at risk in Nigeria,” he said.
Nigeria, Africa’s largest producer with 2.6 million barrels per day, is already losing 25% of its exports to unrest in the country’s oil-producing south.
“It does seem the militant groups do have widespread support and that will continue to hold production at threat,” said Burg. “Going forward, there will be a premium built into prices to reflect the risk.”
The market also remains concerned over US gasoline (petrol) reserves during the peak demand for motor fuel during the summer driving season when Americans throng highways en route to their holiday destinations.
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First Published: Mon, Jun 25 2007. 12 20 PM IST
More Topics: Oil | Brent | strike | Nigeria | Money Matters |