Crude Oil Futures Take Dip in London

Crude oil futures fell in London on Friday amid expectations that a 5-day-old general strike in Nigeria over fuel prices may end this weekend. That would remove a threat that oil exports from Africa’s largest producer may be disrupted.

Strike leader Adams Oshiomhole, president of the Nigeria Labor Congress, met with Nigerian President Olusegun Obasanjo on Friday and will discuss a compromise with other union leaders today, Agence France-Presse reported.

“Strikers are looking for a settlement on Saturday, so that leaves some uncertainty in this market,” said Paul Goodhew, a broker at GNI in London. Even so, he said, “there was too much of a premium built into prices.”

Brent crude oil for August delivery fell 57 cents, or 2%, to $27.63 a barrel on London’s International Petroleum Exchange. The U.S. commodities markets were closed Friday for the Fourth of July holiday. On Thursday, crude for August delivery rose 27 cents to $30.42 a barrel in New York trading.

Prices fell Friday in Europe after oil workers represented by Nigeria’s National Union of Petroleum and Natural Gas Workers, or Nupeng, halted a pullout from export terminals, according to a Reuters report that quoted union President Peter Akpatason.

The general strike, which began Monday to protest an increase in fuel prices, hasn’t affected pumping or exports, according to Royal Dutch/Shell Group, Nigeria’s largest foreign producer.

“We’ve put all the appropriate measures in place to minimize any disruption, but there has been no disruption,” a Shell spokeswoman said in London.

A second oil union, Pengassan, which represents more senior oil workers, is more crucial to the process of exporting oil than Nupeng, said analysts and Pengassan officials.

Pengassan, or the Petroleum and Natural Gas Senior Assn. of Nigeria, earlier vowed to stop working Sunday if progress wasn’t made in the negotiations.

Concerns about oil supply from Nigeria and Iraq are helping prop up oil prices, Algeria’s oil minister said Thursday.

“There is uncertainly on the oil market because of Iraq and questions about Nigeria,” Algeria’s Chakib Khelil said at a news conference in Paris. “The market is well-supplied, and prices will remain high as long as those uncertainties remain.”

Khelil’s comments came a few hours before traders learned that Iraq had issued its second tender to sell crude oil since the country’s government was overthrown by U.S.-led forces. The news was viewed as a sign that oil exports are continuing, albeit slower than before the war.