April 25, 2007	Wednesday	Rabi-us-Sani 07, 1428

LONDON, April 24: World oil prices fell heavily on Tuesday, despite market nerves over lost production in Nigeria, the world’s sixth biggest exporter of crude.

In London, the price of Brent North Sea crude for June delivery shed $1 to $67.13 per barrel on technical factors during electronic deals, traders said.

New York’s main oil futures contract, light sweet crude for delivery in June, dropped $1.16 to $64.73 per barrel in floor trading.

Prices unwound “following a large selling order. It’s all very sudden,” said a broker at Bache Financial in London. “There seems to be no reason for this price move.”

Prices had risen earlier on Tuesday owing to concerns about Nigerian supplies.

Ruling party candidate Umaru Yar'Adua won Nigeria's presidential election on Monday but foreign observers questioned the credibility of a vote that, along with state polls the week before, claimed at least 200 lives.

Nigeria’s current production is down an estimated 25pc owing to violence in the oil-rich Niger Delta.

“There’s always going to be a risk associated with Delta production, although Shell’s talking about going back and potentially restarting production,” Global Insight analyst Simon Wardell said.

“I think that at any time you could start to see an upsurge in violence and that could put plans to restart oil-on-hold, potentially even hit the oil which is currently being produced.

“It lowers risk if you have people accepting the results and trying to work together, but I’m not sure it’s in the immediate future,” Wardell added.

“The situation in the oil market is still uncertain because of the election in Nigeria and production in Nigeria has been missing,” said Tetsu Emori, chief commodities strategist at Mitsui Bussan Futures in Tokyo.

Emori said nobody really knows the true nature of outages in the dangerous Delta region and the market fears that even more production could be disrupted.

“That's why the market is quite nervous at the moment,” he said.

The market is also concerned about high US gasoline demand and insufficient production by the Organisation of the Petroleum Exporting Countries (Opec), Emori said.

London-based energy analysts, the Centre for Global Energy Studies (CGES), on Monday said reduced Opec production risks another damaging price spike this year.—AFP