Oil prices rose on Monday amid an ongoing North Sea pipeline outage and because a strike by Nigerian oil workers threatened its crude exports
Oil prices rise on ongoing North Sea outage, Nigeria strike – Oil prices rose on Monday amid an ongoing North Sea pipeline outage and because a strike by Nigerian oil workers threatened its crude exports. Signs that booming U.S. crude output growth may be slowing also supported crude prices, although the 2018 outlook still points to ample supply despite production cuts led by OPEC. The higher prices came on the back of a strike by Nigerian oil workers and the ongoing North Sea Forties pipeline system outage, which provides crude that underpins the Brent benchmark. North Sea operator Ineos declared force majeure on all oil and gas shipments through its Forties pipeline system last week after cracks were found. “The force majeure … is acting as a major prop for crude,” said Sukrit Vijayakar, director of energy consultancy Trifecta. In Nigeria, the Petroleum and Natural Gas Senior Staff Association of Nigeria, whose members mainly work in the upstream oil industry, started industrial action on Monday after talks with government agencies ended in deadlock, potentially hitting the country’s production and exports. “Oil prices are getting a bounce… as the Nigerian oil union talks have hit an impasse and will begin strike action,” said Stephen Innes, head of trading for Asia/Pacific at futures brokerage OANDA.
Gold Prices Edges Higher as U.S. Dollar Pulls Back – Gold prices edged higher on Monday, as the U.S. dollar pulled back despite mounting hopes that a major U.S. tax reform can be passed before the end of the year. The greenback was initially lifted after Republicans on Friday put the finishing touches on a sweeping tax overhaul bill. They are confident Congress will now pass the tax bill this week, with a Senate vote planned as early as Tuesday. The precious metal had strengthened last week after the Fed raised interest rates by 0.25 basis points to 1.50% but did not change its projections for 2018. Gold is sensitive to moves in both U.S. rates and the dollar. A stroner dollar makes gold more expensive for holders of foreign currency, while a rise in U.S. rates lifts the opportunity cost of holding non-yielding assets such as bullion.
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