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Nigerian strike deal knocks the steam out of oil

Hopes of a deal between the Nigerian government and striking workers took some of the steam out of world oil prices on Friday.

The price of benchmark Brent North Sea crude oil for August delivery fell by US$0.45 to US$27.75 per barrel in late trading here.

In New York, the reference light sweet crude August contract closed on Thursday at US$30.42 per barrel, up US$0.27 from the previous closing price. The market was closed on Friday for the US' Independence Day.

"The latest news from Nigeria seems to be that some kind of settlement is occurring," said Deutsche Bank analyst Adam Sieminski.

Compromise

Prices had risen on Thursday amid concerns that the strike would spread to the oil sector, "but the impression we have is that those worries are now easing because it looks like some kind of compromise is going to be agreed," he added.

Nigeria's unions were considering a government offer on fuel prices that could end a five-day-old general strike and remove a threat to halt the country's oil production.

Strike leader Adams Oshiom-hole, president of the Nigeria Labour Congress (NLC), said late Thursday that he would present the government's latest offer to the body's executive council for approval.

"I think we've made more progress today than we have made in the past week. I'm confident that with this spirit we will be able to get an agreement," Oshiomhole said.

After the talks Nigeria's Vice President Atiku Abubakar commented on a possible agreement, saying: "I believe we should finish by tomorrow."

But NLC general secretary John Odah told reporters that the council could not meet before yesterday, and that the strike had not yet been called off.

"The meeting of the national executive council planned for today has been rescheduled for tomorrow at 10:00am. The strike continues," said Odah.

The NLC launched the strike on Monday after Nigerian President Olusegun Obasanjo ordered an end to fuel subsidies, forcing petrol prices up 54 percent.

But oil companies insist their production activities in the country have not been affected by the unrest.
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