Crude Oil Rises as Nigeria Strike Begins, Storm Nears Louisiana
June 30 (Bloomberg) -- Crude oil rose in London as a general strike began in Nigeria, the sixth-largest oil-supplier to the U.S., and a tropical storm moved across the northern U.S. Gulf Coast, where numerous oil and gas fields are located.
Nigerian unions, including some oil workers, began a strike today to protest rising domestic fuel prices. In the U.S., Tropical Storm Bill, the second named storm of the Atlantic season, was forecast to reach the Louisiana coast later today.
``With Louisiana under a hurricane watch, traders will be interested to know if this hits the oil tanker routes and delays imports,'' said Christopher Bellew, a broker at Prudential Bache International Ltd. in London.
Brent crude oil for August settlement rose as much as 1.1 percent, or 29 cents on the International Petroleum Exchange in London and was up 21 cents at $27.51 a barrel at 11:50 a.m. local time.
In New York Mercantile Exchange electronic trading, August crude oil was up 11 cents at $29.38 a barrel.
The tropical storm was about 130 miles south of Morgan City, Louisiana, at 4 a.m. local time, and could reach hurricane status by the time it hits land, the U.S. National Hurricane Center said. Maximum sustained winds were near 50 miles (80 kilometers) per hour.
Gulf storms sometimes force energy companies to evacuate offshore platforms for a few days, and can disrupt coastal refineries and shipping.
Strike
Talks between the Nigeria Labour Congress and the government to avoid a strike broke down last night, Agence France-Presse reported. The strike protests a government decision to raise fuel prices by 54 percent and will last until that decision is reversed, AFP reported, citing union president Adam Oshiomhole.
In Nigeria, ``there are protests in Lagos, but not much talk yet about the (impact on) the oil industry,'' Bellew said.
Pengassan, the white-collar oil workers' union, said its members directly involved in crude production and loading are reporting for work, where they are engaging in a passive strike, or work slowdown.
``The type of action is not an immediate close down of the flow stations,'' Sunny Onyemachi, an assistant secretary general at Pengassan, said in a telephone interview from Lagos, Nigeria's commercial capital. ``They are showing up but we have asked them not to work.''
The potential threats to U.S. oil imports, from the storm and possible disruptions in Nigeria and Iraq, came after a Department of Energy report last week showed U.S. crude-oil inventories are 11 percent lower than a year ago.
Oil production in Nigeria, the sixth-biggest producer in the Organization of Petroleum Exporting Countries, fell in March when Royal Dutch/Shell Group and other foreign oil companies curtailed pumping because of violence in the Niger delta region.
Previous Difficulties
In April, Nigeria's labor unions called off a strike over pay. That month, the country exported about 700,000 barrels a day to the U.S., making it the sixth-largest supplier.
``We are quite accustomed to Nigerian oil workers' strikes, which tend to end up having a slight impact only,'' said Katsunori Watanabe, director of research at oil futures trader Nihon Unicom Corp. in Tokyo.
Attacks against U.S. and U.K. forces in Iraq and five sabotage bombings this month at oil pipelines in the country, may slow Iraq's efforts to restore exports to prewar levels, traders said.
Iraq Repairs
Still, repairs on a pipeline linking a northern oil field with an export terminal on the Turkish coast will be completed today, according to Basim al-Furati, the deputy head of the oil ministry's technical department.
``It will be very difficult for us to protect every kilometer of pipeline,'' Furati said in an interview.
Iraq earlier this month lowered its year-end production target to 2 million barrels a day from 2.5 million, because of damage from looters and insufficient electricity to power pumps.
The country now produces about 800,000 barrels a day, barely enough to meet domestic demand.
Before the war Iraq pumped 2.5 million barrels a day, or about 3 percent of the world's oil supply.
Last Updated: June 30, 2003 06:59 EDT |
