Oil Price Falls as Nigerian Strike Ends

Oil prices were steady in muted trade on Friday as Nigerian unions called off a general strike without disruption to supply from Africa's biggest oil exporter.

London benchmark Brent crude futures (search) were down six cents at $35.68 a barrel after rising about half a dollar on Thursday. U.S. markets were shut for the funeral of former President Ronald Reagan (search).

U.S. prices hit a record of $42.45 a barrel early this month while Brent soared to a new 13-year high of $39.12 after end-May attacks on foreign workers in Saudi Arabia underscored the risks to supplies from the kingdom, which boosted its production to over nine million barrels per day in June to help cool prices.

"Tense geopolitics should provide some support for prices despite the clear Saudi intention to cool the markets," Deutsche Bank analyst Adam Sieminski wrote in a report. "Even at a lower $35 Brent the geopolitical premium remains."

Prices have retreated from recent peaks after OPEC (search) assured markets of extra supplies of crude and U.S. supply stocks have gradually crept higher.

Supply worries got some relief as Nigeria's main umbrella labor union suspended on Friday a three-day-old general strike, saying the government had complied with a court order to force down fuel prices.

"We have no reason to continue the protest. We have agreed to...suspend the strike," Nigeria Labour Congress (NLC) leader,Adams Oshiomhole, told reporters in the commercial capital Lagos.

The strike did not affect oil supplies from Nigeria, a member of the OPEC cartel and a large supplier to the United States.

Prices are being underpinned by roaring world oil demand, which the International Energy Agency estimated as growing at the fastest rate since 1980.

OPEC members Iran and Kuwait have followed Saudi Arabia in providing Asian oil refiners with full contract volumes as part of the cartel's pledge to hike its output ceiling by two million bpd from July 1.

Saudi Arabia said on Thursday that while Asian buyers would get full term volumes and most other customers would receive higher supplies, extra cargoes would be made available if needed -- the first sign of new oil in the market.

The IEA (search) said that the OPEC supply hike should allow stocks to build further after recent data showed that U.S, crude inventories had risen to their highest level in almost two years.

Gasoline stocks have also built though they remain well under the volume that is considered a comfortable level for summer.