Oil prices rose above $71 a barrel on Friday on fears a general strike in Nigeria could intensify and disrupt crude shipments from the world's eighth-largest exporter. London Brent crude, currently seen as the best benchmark of world oil prices, settled up 96 cents at $71.18 a barrel, after trading as high as $71.50 during the day.
US light crude gained 49 cents to end at $69.14, the highest settlement since September 1. Union leaders in Nigeria vowed to extend their strike against a rise in fuel prices to a third day on Friday, after talks with the government ended in a stalemate.
"Uncertainty around the course of events in the country, where a general strike is underway, continues to keep markets nervous," Barclays Capital said in a research note. The strike has not stopped exports of Nigeria's crude, prized as a feedstock for gasoline, but the government said it would no longer tolerate street blockades and intimidation by unionists, setting the stage for a more hostile face-off.
Militant attacks on Nigeria's oil infrastructure already have cut about a quarter of its output. The majority of oil workers have complied with the strike directive, but Western oil companies have maintained production and exports by replacing union staff with management.
The oil market has pulled back from a 10-month high on Monday, losing nearly $2 in a three-day slide, pressured mid-week by an unexpected jump in US crude stockpiles that lifted inventories to a nine-year high on abundant imports and low refinery use. That bolstered the Organisation of Petroleum Exporting Countries' case that supply is healthy and tight gasoline stocks are due to a lack of refining capacity.
"There is a lot of oil on the market, the stocks are very high," Opec Secretary-General Abdullah al-Badri said on Thursday. "If we add more oil, it would not go to the refineries. It would go to the stocks."
US gasoline stocks rose last week but remained more than 5 percent below last year amid peak summer demand, as refineries have been hit by a series of outages. Refiners are also struggling to build up inventories of heating oil, which declined last week to stand 38 percent below their level at this time last year.
Analysts said worries over Iran's nuclear dispute, the Gulf of Mexico hurricane season and flat non-Opec supply against a backdrop of growing demand were also supporting prices.
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