By Yeganeh Torbati LONDON | Thu Jan 12, 2012 10:11am EST
The sun sets beside an oil rig on the outskirts of Havana February 25, 2011. Credit: Reuters/Desmond Boylan
(Reuters) - Brent crude jumped more than $2 to over $114 on Thursday after Nigeria's biggest oil union said it would shut down oil production, as part of a national strike over a more than doubling of petrol prices.
Brent crude futures for February jumped $2.88 to a high of $115.12, trading around $114.70 at 1500 GMT
U.S. crude oil was up about 1.87 percent at $102.75.
Nigeria's main oil union, PENGASSAN, said it would aim to shut down oil and gas production from Sunday, though industry officials expressed doubts that unions would be able to stop crude exports completely.
Output from Nigeria has so far been unaffected but the threats were enough to unnerve the market as Africa's biggest oil exporter ships around 2 million barrels of crude oil per day and is a key supplier to the United States and Europe.
Container shipping group Maersk Line is unable to bring its vessels carrying consumer goods and foodstuffs into Nigerian ports as a result of the nationwide strikes, a senior official said. Shipping sources told Reuters offshore oil terminals were operating as normal on Thursday.
Tension between Iran and the West also supported prices.
As Washington steps up efforts to punish Tehran over its nuclear program, Japan and South Korea looked to reduce oil imports from Iran and seek alternative sources instead.
Japan, one of the biggest buyers of Iranian oil, pledged on Thursday to take action to cut its Iran crude imports after U.S. Treasury Secretary Timothy Geithner visited Tokyo to hold talks with Japanese leaders.
Washington imposed additional sanctions on Iran last month and the European Union will have a meeting on January 23 to decide on whether to embargo Iran's oil.
Tensions elsewhere in the Middle East also supported prices, traders said, as a Frenchman became the first foreign journalist to be killed in 10 months of unrest in Syria.
"You've got the same potentially bullish factors - Iran, Syria, Nigeria - in the background," said Christopher Bellew, a broker at Jefferies Bache in London. "If it weren't for Iran, probably prices would be lower."
Worries about supply allowed investors to discount reports of sharply higher U.S. crude stocks and disappointing U.S. economic data.
Inventories surged by almost 5 million barrels to 334.65 million barrels in the week to January 6, data from the U.S. Energy Information Administration (EIA) showed. This was well above estimates for an 800,000-barrel build in a Reuters poll.
U.S. retail sales figures released on Thursday revealed the weakest growth in retail sales in seven months, and data from the U.S. Labor Department showed a six-week high in the number of Americans applying for first-time jobless benefits.
U.S. sales were up just 0.1 percent in December, as consumers pulled back their spending especially at department stores and on electronic gadgets.
The euro pared gains against the dollar on Thursday after the U.S. jobless claims data was released, falling to $1.2715, still up 0.1 percent on the day.
"On the downside (we have) the strong dollar against the euro, weak economies in the euro zone, the relatively warm weather we're having in the northern hemisphere," Bellew said.
(Additional reporting by Seng Li Peng in Singapore; editing by William Hardy)
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