Crude oil fell as much as 1.4 percent in New York after oil workers in Nigeria, the biggest producer in Africa, ended a two-day strike.
The government met union demands for higher pay, Lumumba Okugbawa, deputy general secretary of the Petroleum & Natural Gas Senior Staff Association of Nigeria, said in Lagos today. The West African nation is losing more than 600,000 barrels of output a day because of violence, kidnappings and damage to facilities.
``The Nigerian headlines are driving the market lower,'' said Akira Kamiyama, an oil trader at Mitsui & Co. in Tokyo. ``The reaction to the news was quite fast as we can see with the selldown.''
Crude oil for July delivery fell as much as 91 cents, or 1.4 percent, to $64.29 a barrel in electronic trading on the New York Mercantile Exchange and traded at $64.54 at 2:14 p.m. The exchange was closed for regular trading because of a U.S. holiday.
Prices also declined on speculation U.S. fuel prices may ease as refiners increase output to meet summer demand. A U.S. government report last week showed gasoline output rose to the highest since December. U.S. crude oil stockpiles are 7.6 percent above their five-year average, according to the Energy Department.
Brent crude oil futures on London's ICE Futures Exchange fell as much as $1.18, or 1.7 percent, to $69.51 a barrel. The contract closed at $69.71 a barrel in London.
Brent rose to $71.80 a barrel on May 24, the highest intraday price since Aug. 28, as strikes and kidnappings curbed output in Nigeria.
Nigerian Exports
In Nigeria, export loadings were delayed during the strike by about 6,000 union workers at state-owned Nigerian National Petroleum Co., union leaders said last week.
Sabotage and kidnappings in the oil-rich delta region of Nigeria have surged following last month's presidential elections. Three Americans and four Britons were among a group of oil workers kidnapped in Nigeria on May 25, according to U.S. and U.K. government spokesmen.
Gasoline demand in the U.S., the world's biggest oil consumer, peaks from June to August as summer vacations, starting with today's Memorial Day holiday, put more cars on the road.
More than 38 million Americans will travel 50 miles (80 kilometers) or more from home during the three-day holiday break, 1.7 percent more than last year, the AAA forecast on May 17.
Gasoline for June delivery was at $2.3975 a gallon today after rising 2 percent to $2.4037 a gallon on May 25, a one-week high. The contract expires May 31.
To contact the reporter on this story: Nesa Subrahmaniyan in Singapore at nesas@bloomberg.net ; Manash Goswami in New Delhi at mgoswami@bloomberg.net .
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