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Oil prices retreat below USD 65 a barrel following end of Nigerian oil strike

Oil prices fell in light trade Monday, eased by the end of a Nigerian oil workers' strike over the weekend.

Light, sweet crude for July delivery dropped 36 cents to US$64.84 a barrel on the New York Mercantile Exchange midmorning in Singapore. Trading volume was low because of the Memorial Day weekend in the U.S. The contract climbed more than US$1 to US$65.20 a barrel Friday ahead of the long weekend, which traditionally signals the start of the U.S. summer driving season.

Nigerian labor union officials ordered oil workers back to work Saturday after the government agreed to a 15 percent raise for all employees of the Nigerian National Petroleum Company. The unions began the strike Thursday and threatened to target exports in hopes of reversing the sale of government refineries.

"The market is primarily adjusting to the news over the weekend that the Nigerian oil strike ended, and so one factor that had been threatening the market was removed," said Victor Shum, energy analyst with Purvin & Gertz in Singapore.

Nigeria's state oil company holds the majority stake in joint ventures with international oil companies that account for more than 90 percent of the country's oil exports. The strike did not affect crude output from Africa's biggest producer.

Weather forecasts predicting above normal hurricane activity this year will remain a factor influencing oil prices but are not driving the market at this time, Shum said.

The U.S. government has predicted 13 to 17 tropical storms for this year, with seven to 10 of them becoming hurricanes. The likelihood of above normal hurricane activity is 75 percent, the National Oceanic and Atmospheric Administration said last week.

In other Nymex trading, heating oil futures were unchanged at US$1.9391 a gallon (3.8 liters), and natural gas prices fell 8 cents to US$7.560 per 1,000 cubic feet.

The discovery of the submarine has unveiled a few "inconsistencies." For example, how can one explain the fact that the sub was found where it needed to be searched for from the start?

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