Oil Below $116 as Dollar Rises, UK Strike Ends
Oil fell more than $3 a barrel on Tuesday, retreating further from a record high hit a day before, as the dollar firmed and a strike ended at Britain's Grangemouth refinery.
Resumption of talks between Nigerian unions and Exxon Mobil to end a six-day strike that has shut in much of the U.S. oil major's Nigerian output also helped oil's retreat from Monday's record high of $119.93 a barrel.
U.S. light, sweet crude for June delivery was below $116, while London Brent crude was below $114.
"The dollar has got stronger and that has been offsetting the impact of these outages," noted Mike Wittner, head of oil market research at SG.
The dollar firmed against the euro and the yen on Tuesday amid growing speculation the U.S. rate-cutting cycle may be near its end.
Figures from the U.S. Department of Energy (DOE) on Monday had also shown a sharp downward revision in U.S. petroleum demand for the month of February, bolstering fears of demand destruction under way in the world's top oil consumer.
Workers at the Grangemouth refinery in Scotland returned to work on Tuesday after a two-day strike which closed the plant and the 700,000 barrel per day (bpd) Forties North Sea oil pipeline, an official at the UNITE trade union said.
The closure of the refinery and the pipeline, which carries about half of UK's North Sea crude output, had helped drive oil to Monday's record, taking this year's gains to 25 percent.
BP, which operates the Forties pipeline, said the system would reopen on Tuesday, but added that it would take several days to return to normal throughput.
Supplies from OPEC member Nigeria, where a workers' strike has effectively shut in most of Exxon Mobil's daily output of around 800,000 barrels, remained heavily disrupted.
Nigerian oil union leaders restarted talks with Exxon Mobil on Tuesday aimed at ending the six-day-old strike.
Nigeria's second-biggest operator after Exxon, Royal Dutch Shell, said militant attacks had forced it to shut in 164,000 barrels per day of output.
The strike and attacks by Niger Delta rebels have slashed oil production in the world's eighth-largest exporter by half.