Today's Coming Crisis Movie

Thursday, January 12, 2012

Nigerian oil staff threaten to halt production amid nationwide strike

Oil union says it will shut down output on Sunday as pressure grows on Goodluck Jonathan to restore subsidies.

A major union representing Nigerian oil workers has said it will shut down all production on Sunday as part of a nationwide strike paralysing the country, which is vital to US oil supplies.

It is unclear how large an effect the planned shutdown by the Petroleum and Natural Gas Senior Staff Association of Nigeria (Pengassan) will have. However, oil prices rose on Thursday over concerns about global supplies, meaning even the threat could be enough to push prices higher.

The strike began on Monday after the government reversed a two-decade-long subsidy programme that had kept gas prices low for consumers. Anger over the government's decision has triggered demonstrations, and related violence has left at least 12 people dead.

Pengassan said if the government did not restore the subsidies, the union would be "forced to go ahead and apply the bitter option of ordering the systematic shutting down of oil and gas production".

Benchmark oil prices rose by $1.03 to $101.90 per barrel on Thursday in electronic trading on the New York Mercantile Exchange. Prices rose over concerns about global supplies.

Nigeria is the fifth largest oil exporter to the US. Losing those supplies would force American refineries to replace 630,000 barrels of crude per day. Read More