Crude rises as Nigeria strike threat looms
Crude rises as Nigeria strike threat looms
Crude rises as Nigeria strike threat looms

Oil prices rose to near $100 a barrel in Asia on Friday as negotiations to avert a looming strike in major oil producer Nigeria ended for the day without any result.

Prices also rose as worries built up again about supply tightness this year following a sharp dip late Thursday on word that Iranian oil would not soon be forced off European markets.

Benchmark crude for February delivery rose 76 cents to $99.86 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell sharply just before close Thursday in New York, settling $2 lower at $99.10, after a report that the European Union probably would not embargo Iranian oil until summer.

Brent crude rose 76 cents to $111.81 per barrel in London.

Oil prices climbed as talks between union officials and Nigeria’s government ended late Thursday night without any announcement. They are scheduled to resume Saturday.

A major union is threatening to halt crude oil production as part of a nationwide strike and protests starting Sunday in Nigeria — the fifth-largest oil exporter to the U.S. — that is raising anxiety in worldwide oil markets.

Analysts said oil supply would be crimped in the short term if unions manage to shut down production.

Crude prices have also been pushed up recently by pressure from the U.S on other nations to ban Iranian oil quickly in response to Iran’s growing nuclear program. But an official close to the talks said Thursday that the European Union probably will not embargo Iranian oil until summer. The EU is expected to make a decision on an oil embargo at a Jan. 23 meeting.

Balanced against that were optimistic comments by the European Central Bank and good results from bond auctions by Spain and Italy that helped push up risk appetite among traders because they were a sign of improving economic prospects that could result in higher demand for oil, analysts said.

“The indications are for tight oil markets, so I think the prices only dropped off (Thursday) because of that report” about the delayed European embargo, said Natalie Robertson, a commodities analyst at ANZ Bank in Melbourne, Australia.

“I think oil should continue to be supported going forward because we also have a general view that the U.S. dollar is going to remain weak,” which makes commodities priced in dollars appear cheaper for those spending other currencies, Robertson said.

In other Nymex trading, heating oil rose rose 2.2 cents to $3.08 per gallon and gasoline futures added 2.7 cents at $2.76 per gallon. Natural gas futures were down 1.3 cents to $2.69 per 1,000 cubic feet.


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