Oil prices slide to below $71 per barrel

Oil prices fell by more than half a percent to below $71 a barrel on Monday as Nigerian unions ended a strike that had threatened to disrupt oil exports. Benchmark London Brent crude for August fell 47 cents to $70.71 a barrel.
The contract touched a 10-month high of $72.25 a barrel early last week as dealers fretted over the potential impact of the indefinite general strike.
US light, sweet crude for August delivery fell 58 cents or 0.84 percent to $68.60 a barrel, unwinding half of last week's gains that were also fuelled by concerns that US refiners are struggling to meet fuel demand in the world's top consumer.
At the weekend, unions in Africa's top oil producer called off their strike after the government agreed to freeze fuel prices for a year. The general strike had halted most economic activity but did not affect oil exports, despite threats from the union that they would remove key oil sector personnel.
Western companies replaced key staff with management to keep oil flowing. However, concerns about the ongoing militant violence that has already shut a quarter of Nigeria's output are likely to persist, supporting prices, analysts said.
Four foreign hostages were released unharmed on Saturday. "There's still a fair bit of production offline. There are some good signs they might sort out these issues, but that's not near term, we're talking months," said Tobin Gory, commodities strategist at the Commonwealth Bank of Australia.
The state of US fuel supplies in the midst of the peak demand summer driving season should also keep prices supported. Inventories of gasoline and heating fuel are sharply below seasonal norms, and refiners have thus far been unable to crank up output to refill them, US data showed last week.
"(We) believe that the continued stress on the US refining system from the adjustment to more stringent product specifications could lead to further refinery outages, posing a downward risk to US refinery runs," said Goldman Sachs in a research report.
Since late on Friday, Texas refineries operated by Lyondell Chemical Co, Exxon Mobil and Valero all reported upsets, according to regulatory filings. Speculators took a more bullish view of prices in the week to June 19, lifting their net length in gasoline markets to the highest in three and a half years, while heating oil length rose to its highest since October 2003, regulatory data showed on Friday. Nymex crude oil speculators also boosted their net length, CFTC data showed.