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Commodities: Brazil strike aids oil recovery

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Date: Tuesday 15 Jul 2008

LONDON (ShareCast) - A strike by oil workers in Brazil and ongoing concerns about possible unrest in Nigeria helped crude prices recover from an earlier dip towards $142, although the lead was slim.

A five-day walkout at state-owned Petrobas will stop production of around 400,000 barrels a day from platforms in the Campos Basin, responsible for much of the country’s domestic oil output.

But early dollar strength limited the recovery, leaving US light crude for August delivery up just 10 cents at $145.18 a barrel on the New York Mercantile Exchange.

The end of a two-week-old ceasefire by rebel group the Movement for the Emancipation of the Niger Delta could see the resumption of attacks on oil facilities in the oil-rich region of Nigeria.

A spate of violence and kidnappings of oil workers attributed to MEND has caused output from the world’s eighth largest oil producer to fall by one quarter in recent months.

On the metal market, gold shone as investors feared the financial crisis may have further to run following the US government’s rescue plan for mortgage firms Fannie Mae and Freddie Mac.

The yellow metal’s safe haven status helped the August contract jump $13.10 to $973.70 an ounce in New York, not far off its best of the day.

Elsewhere, silver was in demand and copper inched higher, although platinum and palladium both lost out.

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