Oil dips as dollar gains counter Nigeria supply fears

Oil dips as dollar gains counter Nigeria supply fears
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First Published: Fri, Jun 13 2008. 10 40 AM IST
Updated: Fri, Jun 13 2008. 10 40 AM IST
Singapore: Oil was a touch easier on 13 June after a volatile previous session when the market grappled with supply worries in Nigeria, the world’s eighth-largest producer, and a firmer US dollar.
US crude oil was off 6 cents at $136.68 a barrel by but still within sight of last week’s record $139.12.
The contract traded in a near-$6 range on 12 June, ending 36 cents higher at $136.74 a barrel, as concerns mounted about a possible strike in Africa’s top oil producer.
London Brent was up 3 cents at $136.12 a barrel.
Nigeria’s senior oil workers’ union, which was pushing for the expatriate managing director of Chevron’s local unit to be transferred out of the country, said on 12 June that talks to avert a lockout were not going well and renewed its strike threat.
“Certainly, we’re worried about Nigeria, we’re still very mindful of the situation,” said Peter McGuire, managing director of Commodity Warrants Australia.
A strike would further dent oil output in Nigeria, where a fifth of capacity has been shut since early 2006, when ethnic militants in the Niger Delta began a violent campaign of sabotage against oil installations.
But US currency gains weighed on oil prices, which have gained more than 40% this year as investors played on a weaker dollar and bought commodities to hedge against inflation.
The dollar stayed firm against the euro on Friday, holding on to gains made the previous day after surprisingly strong US retail sales data supported expectations for two or more Federal Reserve interest rate hikes this year.
Later on Friday, traders will watch US consumer price data for May and real earnings for further signs on the economic health of the world’s top oil consumer.
The market will also keep an eye on moves by regulators in the United States and Britain to rein in speculative crude futures trading, which OPEC has said is the main cause of the spikes in oil prices.
Iraqi Oil Minister Hussain al-Shahristani reiterated that view on Thursday, saying more crude from Saudi Arabia or other OPEC producers will not solve the problem of high global prices.
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First Published: Fri, Jun 13 2008. 10 40 AM IST
More Topics: Oil Prices | Commodities | Oil Supply | Nigeria | OPEC |