PERTH, April 29 (Reuters) - Oil eased towards $118 on
Tuesday as focus turned to the dollar, after hitting a record a
day ago on supply snags in Nigeria and Britain that have
combined to shut nearly 2 million barrels per day (bpd) of
Atlantic Basin output.
U.S. light crude for June delivery <CLc1> shed 25 cents to
$118.50 a barrel by 0328 GMT. It closed 23 cents higher at
$118.75 on Monday, after striking a record high of $119.93.
London Brent crude <LCOc1> fell 22 cents to $116.52.
"The issues in Nigeria and North Sea are significant but
these outages tend to be overcome pretty quickly, so I think
the market is taking profit from record prices," said Mark
Pervan, a senior commodities analyst at the Australian & New
Zealand Bank.
Pervan said investors could also be pulling out funds from
the energy sector to invest in the U.S. dollar, which could
get
support from expectations the Federal Reserve would trim its
funds rate by a slim 25 basis points to 2 percent and signal a
desire to hold rates for the time being. []
Nigeria's crude oil output was cut by around half on Monday
by striking workers at Exxon Mobil Corp <XOM.N> and recent
attacks by rebels on Royal Dutch Shell <RDSa.L> operations.
Exxon Mobil said it had shut virtually all its Nigerian
output, close to 800,000 bpd, due to the five-day-old strike.
[]
Niger Delta rebels, meanwhile, have said an April 24
pipeline attack had shut down a further 350,000 bpd of
production by Royal Dutch Shell. A previous bombing raid had
hit 169,000 bpd of Shell's Nigeria output, the company said
last week.
In Britain, the 700,000-bpd Forties North Sea crude
pipeline, which carries nearly half of the country's oil,
remained closed on Monday due to a strike over pensions at the
210,000-bpd Grangemouth refinery.
Ineos, owner of the Grangemouth refinery, expects striking
employees to return to work on Tuesday but said it would take
up to three weeks to return the refinery to normal operations.
BP <BP.L> has said the Forties pipeline, which relies on
the Grangemouth refinery for power, could then be back in
operation within 24 hours but might take a few more days to
resume full flow.
Some cargoes of Forties crude originally slated for loading
in early May are set to be deferred by about three days because
of the shutdown, a trade source said on Monday. []
The Nigeria and North Sea outages together represent more
than 2 percent of world crude oil consumption.
Despite oil soaring to near $120 a barrel, the Organization
of the Petroleum Exporting Countries (OPEC), which produces
more than a third of the world's oil, has refused to pump more,
reiterating that the market is adequately supplied.
OPEC President Chakib Khelil blamed high prices on the fall
in the dollar and said he could not rule out prices rising to
$200 a barrel.
(Reporting by Fayen Wong; Editing by Ramthan Hussain)
