Volatile oil prices dip to lowest level in four months
Volatile oil prices dip to lowest level in four months
LONDON (AFP): Oil prices showed the most dramatic movement
during last week, falling to their lowest level for four months
at the beginning of the week, before rising later, while palm oil
soared to its highest price in over ten years.
Initially, dealers believed the seven-week crippling
oilworkers' strike in Nigeria was about to end as there were
signs of a drift back to work, but Shell then closed one of its
export terminals, and oil prices lifted again.
The price of Brent crude North Sea oil dropped through the key
US$16-a-barrel level on Monday, for the first time in four
months, as dealers believed the Nigerian oilworkers' strike could
end soon.
Rod MacLean, analyst at Smith New Court, said dealers
increasingly believed the seven-week oil strike, was winding down
and could end, as "some of the workers are going back to work,"
particularly in the refineries and oil fields.
The strike, which began on July 4, is aimed at forcing
Nigeria's military regime to release jailed opposition leader
Moshood Abiola and install him as president.
Prices also fell as the end of the traditional July-August
repair period for North Sea platforms neared its end. Dealers
said the return to production in September could temporarily
upset the balance of demand and supply.
But oil prices then lifted to around $16.4 a barrel on news
that Shell International had closed its Forcados terminal in
eastern Nigeria over the weekend. The terminal generally exports
500,000 barrels of crude a day.
Nigeria, OPEC's fifth largest producer, normally produces
around two million barrels of oil daily or three percent of world
production.
Meanwhile, palm oil soared to its highest price in over ten
years on the Rotterdam market, as demand increased in the wake of
a cut in production from Malaysia -- the world's number one
producer -- and on a wave of speculative buying ahead of large-
scale purchases by India and Indonesia.
Weak stocks and firm demand have seen prices rise since the
beginning of the year. The specialist review Oil World, however,
predicted a rise in world production to 13.82 million tons and
15.07 million tons in 1994 and 1995 respectively, compared to
13.68 million tons in 1993.