Oil prices weaker in Asian trade
Tuesday, 26 June 2007
SINGAPORE, June 25 (AFP): Oil prices weakened in Asian trade today after labour unions in Nigeria ended a four-day general strike in Africa's largest oil producer, dealers said.
New York's main contract, light sweet crude for August delivery, was down 45 cents to 68.69 US dollars a barrel from 69.14 dollars in late US trades Friday.
Brent North Sea crude for August delivery eased 58 cents to 70.60 dollars.
Labour unions in Nigeria called off their four-day strike Saturday 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 per cent 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.
New York's main contract, light sweet crude for August delivery, was down 45 cents to 68.69 US dollars a barrel from 69.14 dollars in late US trades Friday.
Brent North Sea crude for August delivery eased 58 cents to 70.60 dollars.
Labour unions in Nigeria called off their four-day strike Saturday 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 per cent 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.