Oil jumped more than a dollar to top $71 a barrel on Friday on fears a strike by Nigerian unions could intensify and disrupt shipments.
Oil jumped more than a dollar to top $71 a barrel on Friday on fears a strike by Nigerian unions could intensify and disrupt shipments from the world's eighth largest exporter.
London Brent crude, currently seen as the best benchmark of world oil prices, settled up 96 cents at $71.18 a barrel. U.S. light crude rose 49 cents at $69.14.
Union leaders in Nigeria vowed to extend their strike against a rise in fuel prices to a third day on Friday, after talks with the government ended in a stalemate.
"Uncertainty around the course of events in the country, where a general strike is underway, continues to keep markets nervous," Barclays Capital said in a research note.
The strike has so far not stopped exports of Nigeria's gasoline-rich crude, but the government said it would no longer tolerate street blockades and intimidation by unionists, setting the stage for a more hostile face-off. Militant attacks on oil infrastructure have already cut about a quarter of Nigerian output.
The majority of oil workers have complied with the strike directive but Western multinationals have sustained production and exports by replacing union staff with management.
The market has pulled back from a 10-month high on Monday, losing nearly $2 in a three-day slide, pressured mid-week by an unexpected jump in U.S. crude stockpiles that lifted inventories to a nine-year high on abundant imports and low refinery use.
This bolstered OPEC's case that supply is healthy and tight gasoline stocks are due to a lack of refining capacity.
"There is a lot of oil on the market, the stocks are very high," OPEC Secretary-General Abdullah al-Badri said on Thursday. "If we add more oil, it would not go to the refineries -- it would go to the stocks."
U.S. gasoline stocks rose last week but remained more than 5 percent below last year amid peak summer demand, as refineries have been hit by a series of outages.
Refiners are also struggling to build up inventories of heating oil, which declined last week to be 38 percent below their levels at this time last year.
Analysts said worries over Iran's nuclear dispute, the Gulf of Mexico hurricane season and flat non-OPEC supply against a backdrop of growing demand are also supporting prices.
Nigeria Strike Talks Continue (Associated Press)
A resolution to Nigeria's general strike is possible before Monday, labor leaders said Friday, marking the first sign of a softening in the unions' stance since the strike began earlier this week.
"We came together. We assessed the progress and planned ahead," said Abulwahed Omar, head of the blue-collar Nigerian Labor Congress. "We expect that before Monday...this issue will be resolved, otherwise the strike continues."
The strike began Wednesday after the government offered to halve an earlier fuel-price hike, but refused to roll it back entirely as demanded by the labor unions. Talks that ended before dawn Friday registered no progress, but union officials said informal meetings had gone on during the day.
They didn't spell out exactly what progress had been made, but after days of strong rhetoric from the unions, Mr. Omar's comments were the first indication that a resolution was even possible. However, another top union official said formal talks with the government would have to occur before the unions would call off the strike.
"There are informal talks, [but] there are no formal talks at the moment. Probably when there is a breakthrough in the informal talks, then we may...have a formal talk," said Peter Esele, head of the white-collar umbrella bloc. "But if we still have a logjam, the action continues."
Earlier Friday, the government boosted its rhetoric, saying it would no longer stand for public disruption by union members who have been enforcing the strike in major cities by forcibly shutting filling stations and banks. "This kind of act is clearly against the law. It will no longer be tolerated," said Babagana Kingibe, a top government official leading the negotiations, which stretched nearly to dawn Friday without resolution.
"Government will put every measure in place to ensure citizens who want to exercise their fundamental right to go to work do so without molestation, and that the petrol stations and depots are secured," he said.
Mr. Kingibe said labor had declined the government's offer to arrange a joint committee to look broadly at fuel-price controls to see if current arrangements are sustainable.
The unions said they were firm on their demand that the government roll back a recent price hike on fuel, which is deeply subsidized by the federal government. They said the hours of meetings hadn't unblocked the impasse. "I don't know which word is stronger: deadlock or stalemate," he told reporters after the meeting in the capital, Abuja. He said the strike would continue Friday.
Unions also said they aimed to cut production in one of the world's leading producers of crude oil. There was no word, though, on any oil production or export cuts. While major economic activity has been crippled by the strike that began Wednesday, most Nigerians work in the informal economy and essential items are still obtainable, although prices were rising.
Asari, Goodluck and Niger Delta Politics - Analysis (Daily Sun)Recently released Asari Dokubo perhaps gave the farthest insight into why the country home of Vice President Goodluck Jonathan was burnt down not too long ago. According to Dokubo, the VP was a victim of a ploy by some disgruntled elements who wanted to create the impression that Dr. Jonathan is hated by his people and is not in charge of the area.
From the way Dokubo sounded, however, that was a misplaced strategy as to him, the Vice President has enormous good will among his Ijaw kinsmen.
In spite of this assurance, it needs no emphasis to say that the VP is passing through a very difficult and trying period. He is undoubtedly the first Vice President whose direct kith and kin have continued to constitute themselves into a national nuisance in spite of the belief that involving one of their own at the highest level of government in the country would placate them.
Between December 16, 2006 when Jonathan emerged as the Vice Presidential candidate of the ruling Peoples Democratic Party (PDP) and now, the nation has witnessed the most sordid events in the Niger Delta region, especially in his native Ijaw land. And which acts were perpetrated mostly by his own kinsmen. Dr. Jonathan cannot be finding this funny and nobody would wish to be in his shoes. What is more, not even Dokubo’s release from prison custody which naturally must have been made possible through the inputs from people like the Vice President seems to be bringing any succor.
Going by media reports, the first thing Dokubo did upon arrival in Port Harcourt last week was to ask the expatriates working in the region (Niger Delta) to leave the area. In fact, within 48 hours after his return, the militants struck again and kidnapped more foreigners.
The natural question now is: Where does this leave the Vice President who must be very embarrassed that the bold and commendable step taken by his boss, President Umar Yar’Adua, does not seem to have the potency of yielding the expected benefits?
According to media reports, Asari Dokubo has vowed to fight on. In an interview with a national daily published earlier this week, he was quoted as saying that the government created the crisis in the region and that it, the government, should solve the problem.
Instructively, Asari, in passing this buck to government, does not seem to be interested in distinguishing between the regime of his former incarcerator, Olusegun Obasanjo and this current one in which his own kinsman is a major player. Even when he says he would try to help Jonathan, a fellow Ijaw man, to succeed, he does so disinterestedly. Asari does not sound unduly sentimental about the entire matter.
Personally, I admire Dokubo’s attitude to the issue, more especially his condemnation of hostage taking by the militants, made up mostly of his Ijaw brethren.
I have heard some argue that his release may be an exercise in futility as that gesture might not be appreciated by him and all those concerned. I do not buy this argument. Dokubo’s release is a pragmatic measure by the new Yar’Adua administration and it would be wrong to nurse a sense of regret as early as now.
The federal government had no option but to release Asari as a basis for continued dialogue with the militants. I have also come across the argument to the effect that the choice of an Ijaw man as Vice President was not necessarily an effective strategy towards finding a lasting solution to the crisis. Well, it cannot be the best or only strategy but it was certainly a wise move.
That the militant Ijaw did not abandon their weapons the next day after their kinsman emerged as Vice President of Nigeria does not mean that it was not a proper step to take. What is important is for us to realize that the emergence of an Ijaw man as Vice President is not an end in itself but one of the means to an end.
Yes, I am one of those who believe that Dr. Jonathan could use his position to make a positive impact on the Niger Delta crisis. Otherwise, the whole idea of drafting him there would be defeated. When he emerged the Vice Presidential candidate of the PDP and it became evident that he will eventually emerge as Vice President along with his boss, Yar’ Adua, some of us who come from a part of the country whose people hankered for either of the two positions – the President or Vice President – felt it was a necessary sacrifice.
I still think so and I would personally do anything in my own little way to let the entire country realize the benefit of the choice of an Ijaw man as President. This is to say nothing of Jonathan’s personal attributes which set him aside as probably one of the most qualified Ijaw to be given that position. I wish the Vice President the best of luck as he moves to meet the expectations of Nigerians. He needs the sympathy and support of every Nigerian.
I personally have a direct interest in the Niger Delta matter; indeed what I have always described as selfish interest. As I have noted previously in this column, the development of the swampy Niger Delta region is of strategic importance to me and my people. My village in Imo state is less than one hour drive to Port Harcourt and less than two hours by road to Yenagoa.
In fact, by the time the new governor of Imo state implements one of the plans he has for the people of my area, it will take less then 30 minutes to get to Port Harcourt from my village and just about an hour from there to any part of Bayelsa State.
Although Imo is an oil producing state, Rivers and Bayelsa states are where the liquid of contention, oil, is located in large quantities. By sheer proximity, it means that I will be a direct beneficiary if the area in reference is transformed from what it is now to a sprawling metropolis like Abuja where I currently reside. I always ask myself what I am doing in Abuja when the very commodity which was instrumental to its current status is being produced at the back of my home down East.
Meanwhile, Abuja is more than a ten-hour journey, by road, from my village. Compare this with one hour to Rivers state and less than two to Bayelsa and you see why I, together with my people, should be anxious that our leaders tackle the Niger Delta problem with the seriousness it deserves.
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