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Reuters: Oil falls to $68 as Nigeria protest ends

Wed May 16, 2007 11:20 AM BST

LONDON (Reuters) – Oil fell to $68 on Wednesday, unwinding earlier gains after Nigerian protesters ended their occupation of an oil hub in the world’s eighth biggest exporter.

The sit-in by villagers had forced operator Royal Dutch Shell (RDSa.L: Quote, Profile , Research) to cut production by another 170,000 barrels per day. Militant attacks have shut nearly 900,000 bpd, or 30 percent of supply capacity, from Africa’s biggest oil producer.

At 1003 GMT London Brent crude , currently more representative of the global oil market than U.S. oil, was down 11 cents at $68.00 a barrel after jumping almost 2 percent on Tuesday and hitting a session high of $68.54 on Wednesday.

News the occupation had ended knocked almost $1 off Brent initially, tipping it to $67.68.

U.S. crude futures fell 27 cents to $62.90 a barrel.

“We have left the place out of respect for our elders and chiefs. We will allow Shell to do its work,” said Teddy Penedibebari, who led the protest which began on May 10.

The next price driver is likely to be U.S. stocks data at 1430 GMT.

A Reuters poll of analysts pointed to a 1.1 million barrels increase in gasoline stocks, ahead of peak summer demand, as refiners return from maintenance shutdowns. Crude inventories were expected to have risen by 100,000 barrels.

Falling U.S. gasoline stocks in recent weeks have helped push average U.S. pump prices to a record $3.10 a gallon.

(reporting by Ikuko Kao in Tokyo)

© Reuters 2007. All Rights Reserved.

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