Oil prices dropped in Asian trading on Monday after no major disruptions to production were reported around the weekend presidential election in Nigeria, Africa’s largest oil producer. An overseas monitor, however, said the electoral process failed to meet international standards.
Light, sweet crude for June delivery dropped 16 cents to $63,95 a barrel in electronic trading on the New York Mercantile Exchange midmorning in Singapore. The May contract on Friday rose $1,55 to settle at $63,38 a barrel before expiring, while the June contract settled at $64,11, up 79 cents.
The electoral period in Nigeria — a main supplier to the United States — has been chaotic. At least 49 people have died in violence since April 14.
Stepped-up violence in the unruly southern region where crude is pumped has trimmed Nigeria’s daily production by about one quarter, helping send global crude prices higher. More than 150 foreigners have been kidnapped over the past year. One analyst said there were hopes the election would lead to the resumption of normal levels of crude production in Nigeria.
”In the near term, the market is range bound and there is some expectation that the shut-in production in Nigeria will return — not immediately but maybe in a few weeks,” said Victor Shum of Purvin & Gertz in Singapore. ”It may well be wishful thinking, but that’s part of the market sentiment.”
Turnout appeared low for Saturday’s presidential vote, which was marked by ballot-paper shortages in opposition strongholds, intimidation by thugs and open rigging favouring the ruling party of outgoing President Olusegun Obasanjo.
Hours before the start of the vote, a truck bomb aimed at electoral commission headquarters ran into barriers and failed to explode. Police said the attacker pointed the truck loaded with fuel and gas cylinders toward the headquarters and placed a rock on the accelerator before jumping from the vehicle, which was stopped by barriers and a power pole before reaching the building in the capital.
A top opposition politician on Sunday called for the annulment of the presidential vote as observers of the United States-based International Republican Institute identified numerous voting-day irregularities, including ballot box stuffing and phony results.
But prices remained supported by other concerns, such as strong demand from the world’s second-largest oil consumer, China, which reported on Monday that March crude oil imports rose 8,8% on year. Analysts expect demand to remain strong if Beijing is unable to rein in the country’s sizzling economy, which grew 11,1% in the first quarter, according to GDP figures released last week. – Sapa-AP