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Monday March 21, 08:35
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Oil approaches $57 on IMF growth forecasts and Nigeria strike threat
(by Julia Jenson)
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Oil prices moved closer to $57 a barrel on Monday on forecasts of strong demand by the IMF and worries about possible supply disruptions in Nigeria, Africa’s largest producer.
April crude futures rose $0.29 to $57.01 a barrel.
International Monetary Fund chief Rodrigo Rato said on Saturday that the world oil prices will remain high for two years ahead on strong deamnd and supply constraints.
"We have to be aware that probably oil prices will stay high, although probably not at this level, in the next two years at least because of demand pressures -- there is certainly very strong demand in the world for oil -- and also because of certain supply constraints," Rato said in New Delhi.
The Organization of the Petroleum Exporting Countries this week may start talks on a second 500,000-bpd increase in case prices keep above $55, almost immediately following Wednesday’s decision to step up output by another 500,000 barrels per day (bpd).
"The problem for OPEC members and their ability to control prices is that they are now at a stage where the market is aware of how much spare capacity they have, and it is not a lot," said Mark Pervan, a Melbourne-based analyst at Daiwa Securities. "So pledging more production just means less available supply from them."
The National Union of Petroleum and Natural Gas Workers of Nigeria will join the strike that will last three days beginning April 11 and is likely to affect oil output in the nation, confirmed Mojibayo Fadakinte, the general secretary of the white-collar Petroleum and Natural Gas Senior Staff Association of Nigeria.
``Oil production has to be affected,’’ Fadakinte said. ``We are not exempting any sectors this time around.’’
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