Oil Prices Surge Amid Nigerian Labor Strike and Russian Port Closure

Strategic Insights -

The price of crude and refined oil futures increased significantly following a Nigerian labor strike and the temporary closure of the Novorossisk port in Russia. West Texas Intermediate (WTI) crude oil futures rose by 25 cents to $20.43 per barrel, nearing last month's one-year high. The strike in Nigeria has disrupted oil exports, while the port closure in Russia is expected to drastically reduce crude exports.

Key Takeaways:

  • West Texas Intermediate (WTI) crude oil futures for August delivery closed at $20.43 per barrel, up 25 cents, on the New York Mercantile Exchange.
  • The price of WTI crude oil futures peaked at $20.74 per barrel, which is within 2 cents of the one-year high of $20.76 set last month.
  • August North Sea Brent futures rose 30 cents to $18.26 per barrel on London's International Petroleum Exchange, narrowing the WTI-Brent spread to $2.17 per barrel.
  • Physical Dated Brent leaped 78 cents to $18.21, while Nigerian crudes retained their differentials, with Bonny Light at a premium to Dated Brent of 30 cents per barrel.
  • Fears of the disruption of Nigerian exports have added more than $1.25 per barrel to crude prices since last Thursday.
  • Moscow announced that the main oil berth at its principal crude oil-loading port of Novorossisk will be closed for maintenance for three weeks in August, sharply reducing Russian crude exports for that month.
  • Refined product prices, for a change, about kept pace with crude oil, with unleaded regular gasoline futures for August delivery to New York Harbor rising 0.54 cents to 54.31 cents per gallon.
  • August No. 2 heating oil futures gained 0.74 cents to 50.44 per gallon, while the 3-2-1 crack spread was little changed at a very depressed $1.84 per barrel.

Statistics:

  • West Texas Intermediate (WTI) crude oil futures: +25 cents to $20.43 per barrel.
  • August North Sea Brent futures: +30 cents to $18.26 per barrel.
  • Physical Dated Brent: +78 cents to $18.21.
  • Bonny Light premium to Dated Brent: +30 cents per barrel.
  • Fears of Nigerian export disruption: added over $1.25 per barrel to crude prices since last Thursday.
  • Wholesale product prices:

+ Unleaded regular: +0.47 cents to 59.83 cents per gallon.

+ Low-sulfur diesel: +0.48 cents to 54.18 cents per gallon.

+ No. 2: +0.30 cents to 52.69 cents per gallon.

Sources:

  • "Oil Prices Jump on Nigerian Strike; Late Profit-Taking Reduces Gain," The Oil Daily, August 1994 (no specific date).
  • "Nigerian Oil Strike Disrupts Exports," The Oil Daily, August 1994 (no specific date).
  • "Novorossisk Port Closure to Reduce Russian Crude Exports," The Oil Daily, August 1994 (no specific date).
  • "NYMEX: WTI Crude Oil Futures," New York Mercantile Exchange.
  • "IPE: North Sea Brent Futures," International Petroleum Exchange.
  • "The Oil Daily," national rack price survey, August 1994 (no specific date).