(Updates prices)
By Ikuko Kao and Randy Fabi
LONDON, April 24 (Reuters) - Oil dropped below $116 a barrel
on Thursday as the dollar firmed and investors booked profits
after crude rallied to a record high earlier this week.
U.S. crude <CLc1> tumbled by more than $2 to as low as
$115.55 a barrel at one point. It was trading $1.35 down at
$116.95 by 1510 GMT, dropping for the second straight session
after reaching an all-time high near $120 this week.
London Brent <LCOc1> fell $1.03 to $115.43 a barrel.
Oil and other dollar-denominated commodities came under
pressure after a better-than-expected reading on U.S. weekly
jobless claims boosted the U.S. dollar versus the yen.
"The most important factor to watch on a short-term basis is
the dollar," said MF Global Energy in its daily research note.
Some technical experts believe that oil, which has risen
some 20 percent this year, was in need of a correction after
climbing to a record high of $119.90 on Tuesday.
But the energy complex found support from a planned workers
strike this weekend at a major Scottish refinery that could
force the closure of the key Forties North Sea pipeline.
"Crude oil remains overbought and will need some
confirmation of disruptions to the Forties stream especially if
the dollar maintains its strength," said Olivier Jakob of
Petromatrix.
Talks to resolve the dispute at the 200,000 barrel-a-day
Grangemouth refinery, which collapsed late on Wednesday, are
unlikely to resume and the two-day strike over pensions is set
to go ahead on Sunday, trade union officials said.
"The full shutdown of the refinery could significantly
impact fuel supply availability, due to times involved in safely
resuming operations after the strike as well as its potential
impact on the operation of the Forties pipeline system,"
Barclays Capital said in its research note.
GAS OIL
London's gas oil futures <LGOc1>, European benchmark for
distillate products such heating fuel and diesel, struck their
all-time peak of $1,080.75 a tonne.
"The ICE London gas oil contract is a key leading indicator.
It is still showing strength, much later than normal," said Jan
Stuart, economist with UBS.
Further support to distillates came from Finnish refiner
Neste Oil. It said its diesel production line would be closed
until the end of May. []
Disruptions of some exports from Nigeria, Africa's largest
exporter, were likely to provide limited support to crude oil
prices.
Royal Dutch Shell <RDSa.L> on Thursday reaffirmed its
outages stood unchanged at 169,000 barrels per day since the
latest spate of attacks to its Nigerian oil facilities.
In Libya, some 45,000 bpd of Libyan offshore oil production
had been halted due to a technical problem and could be off line
for a few weeks, the head of Libya's National Oil Corporation
(NOC) said on Thursday. []
(Additional reporting by Felicia Loo in Singapore and Randy
Fabi in London; editing by Santosh Menon/James Jukwey)
(ikuko.kao@reuters.com; +44(0)20 7542 8145; Reuters Messaging:
ikuko.kao.reuters.com@reuters.net))
