Oil prices moved lower on Monday after unions in Nigeria called off a general strike planned for this weekend, reducing the threat of supply disruptions from the world’s eighth largest crude exporter. Nigeria’s government has agreed to freeze fuel prices for a year, the main cause of the dispute.
ICE July Brent fell 98 cents to $70.20 a barrel while Nymex August West Texas Intermediate lost $1.24 at $67.90 a barrel.
Adding to downward pressure was news that Shell plans to restart operations at the Forcadoes oil export terminal in Nigeria next month. Attacks by militants forced its closure more than a year ago.
But fundamental support continues from concerns over US petrol supplies during the peak summer months for demand. US refinery utilisation is running 7.5 per cent below its five-year average and problems are ongoing with several refineries in Texas reporting production losses over the weekend.
Goldman Sachs said it was evident that the problems affecting US refineries were partly due to stresses caused by new more stringent product specifications.
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