Oil prices shot higher on Thursday, extending overnight gains on news of a surprise strike on Tuesday and Wednesday at Chevron Corporation facilities in Nigeria.
However, the strike was called off 48 hours later.
The President, National Union of Petroleum and Natural Gas Workers, Mr. Peter Akpatason, said the strike was initiated on October 9, after Chevron Nigeria Limited, the Chevron Corp subsidiary in the country, allegedly changed some policies with regard to pay that had been agreed to in 2005.
Confirming, the General Manager, Policy, Government & Public Affairs, CNL, Mr. Femi Odumabo, in ane-mailed statement to THE PUNCH on Thursday said, �The illegal strike action, which was initiated by the workers belonging to the National Union of Petroleum and Natural Gas Workers, was called off after the intervention of the national leadership of the union.�
He stated that the strike was �embarked upon by the contract workers of some of the companies providing labour to Chevron locations at Escravos, Warri, Port Harcourt, Abuja, Onne and the Lagos.�
While confirming that there was no violence or disruption to production operations during the period of the strike, Odumabo said necessary dialogue had commenced between the leadership of the union and management with a view to resolving the issues.
Oil prices often rise when oil supplies are threatened in Nigeria, Africa�s biggest oil producer and one of the top overseas suppliers to the United States.
Light, sweet crude for November delivery on the New York Mercantile Exchange climbed by 84 cents to $82.14 a barrel in electronic trading by afternoon in Europe. The contract rose $1.04 on Wednesday.
November Brent crude gained 85 cents to $79.45 a barrel on the ICE futures exchange in London. Brent is similar to Nigeria�s prized Bonny light.
Oil prices also rallied on news of another fire at BP Plc�s Alaskan oil field, as did a report from the International Energy Agency, that record oil highs on the market appeared not to have put a dent in demand.
Traders said investors were also buying ahead of an inventory report from the US Energy Department�s Energy Information Administration, as they bet on data showing an increase in crude stockpiles.
The report was released a day later than normal due to Monday�s Columbus Day holiday.
According to a Dow Jones Newswires survey of analysts, crude oil inventories are expected to have gained 1million barrels in the week ended October 5, while refinery use is expected to have fallen by 0.1 percentage point to 87.4 per cent of capacity.
Gasoline inventories are expected to have fallen by 300,000 barrels last week while distillates, which include heating oil and diesel fuel, are expected to have declined by 600,000 barrels.
However, a consensus is far from clear, with some analysts expecting crude inventories to fall dramatically. A larger debate over whether oil supplies are adequate to meet fourth quarter demand remains far from settled.
The divergent opinions have been reflected in the oil market�s recent volatility and lack of clear direction.
Oil prices have not ventured out of a range between $78 and $83 a barrel for most of the last month, despite two brief forays to record trading prices above $83.
BP Plc this week, reported the fifth fire in two months in the North Slope fields it is in charge of managing.
While the latest fire was small and extinguished quickly on Saturday, BP said it likely would cut production from the Prudhoe Bay field by about 30,000 barrels a day as workers conduct repairs.
Vienna�s PVM Oil Associates feels the cutback would last for two weeks.
The Prudhoe Bay field is the largest in the United States and averaged 300,000 barrels per day over the summer.
It is operated by BP, on behalf of itself and other owners, including ExxonMobil, Conoco Phillips and Chevron.
The IEA�s monthly oil market report, meanwhile, kept its world oil demand growth forecasts for this year and next unchanged and expressed concern over OECD oil stocks � reserves held by the world�s key industrialised countries � have fallen below a five-year average despite rising supply.
Total OECD industry stocks fell 21million barrels in August to 2.66billion barrels, with most of the draw occurring in the US Overall, that was 70.4million barrels lower than the same period last year, the agency said.
The IEA left its estimate of world oil demand growth for this year and the next unchanged at 1.5 per cent and 2.4 per cent respectively.
Heating oil futures added 1.72 cents to $2.2344 a gallon, while gasoline prices climbed 1.64 cents to $2.05 a gallon. Natural gas futures added 8.3 cents to $7.093 per 1,000 cubic feet.
Oct122007