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Oil Prices Steady, Focus on Nigeria Strike

Oil prices steadied on Friday as Nigerian crude exports continued unabated despite a strike by unions.

U.S. light sweet crude for July delivery was up down, and London Brent crude for August fell one cent to $70.21 a barrel.

Union leaders in Nigeria vowed to extend their strike against a rise in fuel prices to a third day on Friday, after talks with the government ended in a stalemate.

"It is likely that the outlook (in Nigeria) will remain uncertain as we approach the weekend positioning, making a directional bias difficult," said Olivier Jakob of Petromatrix.

The strike has so far not stopped shipments of Nigeria's gasoline-rich crude, but its government said it would no longer tolerate street blockades and intimidation by unionists, setting the stage for a more hostile face-off. Militant attacks on oil infrastructure have already cut about 25% of its output.

The majority of oil workers have complied with the strike directive, but Western multinationals have sustained production and exports by replacing union staff with management.

The market has pulled back from a 10-month high on Monday, losing nearly $2 in a three-day slide, pressured mid-week by an unexpected jump in U.S. crude stockpiles that took them to the highest in nine years on abundant imports and low refinery use.

This bolstered OPEC's case that supply is healthy and tight gasoline supplies are due to a lack of refining capacity.

"There is a lot of oil on the market, the stocks are very high," OPEC Secretary-General Abdullah al-Badri said on Thursday. "If we add more oil, it would not go to the refineries -- it would go to the stocks."

U.S. gasoline inventories rose last week but remained more than 5% below last year amid peak summer demand, as refineries have been hit by a series of outages.

Refiners are also struggling to build up stockpiles of heating oil, which declined last week to be 38% below this time last year.

Analysts said worries over Iran's nuclear dispute, the Gulf of Mexico hurricane season and flat non-OPEC supply against a backdrop of growing demand are also supporting prices.