* EU agrees to ban Iranian crude imports; Geithner China
* Nigerian trade unions call for strikes
* Coming up: Weekly U.S. EIA crude inventories at 1600 GMT
(Adds U.S. jobs data, Bonny force majeure, updates prices)
By Claire Milhench
LONDON, Jan 5 Oil was steady at around
$113.80 a barrel on Thursday as geopolitical tensions kept a
floor under prices, following a European Union agreement to stop
importing Iranian crude, but a stronger dollar capped gains.
Brent crude futures were up 10 cents to $113.80 at
1420 GMT, giving up earlier gains as the dollar strengthened.
U.S. crude, which is less influenced than Brent by
international developments and more by domestic oil inventories,
was down 53 cents at $102.69 a barrel, having earlier slipped
more than $1 to an intraday low of $102.16.
Analysts and traders said oil prices had come under pressure
as the dollar rallied, up 0.80 percent against a basket of
currencies at 1420 GMT.
But they added there was potential for crude to rise given
the tensions surrounding Iran and Syria, and calls for strikes
in Africa's biggest producer Nigeria, which may affect crude oil
On Wednesday, European Union governments reached a
preliminary agreement to ban imports of Iranian crude to the EU,
although they have yet to decide when the embargo will be put in
U.S. Treasury Secretary Timothy Geithner will travel to
China and Japan next week to discuss U.S. sanctions on Iran with
top government officials.
"It is the geopolitical situation that is supporting the
prices, with the possible EU import ban on Iranian oil," said
Eugen Weinberg, an analyst at Commerzbank in Frankfurt. "Oil
prices are also establishing themselves above $100 in the case
of WTI (U.S. crude) and above $110 in the case of Brent."
Analysts also pointed to potential problems in Nigeria
following the government's decision to remove gasoline subsidies
at the start of 2012 which has triggered protests and calls for
strikes by trade unions.
"Nigeria has a history of long strikes and that can have an
impact on overall crude exports - that is definitely something
that needs to be watched," said Olivier Jakob, oil analyst at
He warned that the price of gasoline in Europe per tonne was
already above the peak levels seen in the Libyan crisis.
"The West is playing a very dangerous game with Iran - they
are making a lot of assumptions, but if you have something
blowing up in Nigeria, the prices could really start to get out
of control. It is a difficult time to be short oil I think," he
Royal Dutch Shell has declared force majeure on its
Nigerian Bonny Light crude oil exports, but this was related to
a leak caused by "theft incidents" on the Nembe Creek Trunk Line
in the Niger Delta, it said.
Despite the EU embargo threat, Iran says it is ready to ship
its oil to China and other Asian countries as well as
Saudi Arabia has said it is prepared to increase output in
case of a sudden supply cut. But Commerzbank
analysts said it is already producing 10 million barrels per day
and spare capacity would be virtually used up.
"Given these developments, the risk premium on the oil price
can be expected to rise further," they said in a note. "When
spare capacities were last more-or-less exhausted in mid-2008,
the oil price climbed to nearly $150 a barrel."
In the United States, initial jobless claims fell to a
seasonally-adjusted 372,000 week-on-week, compared with a
consensus forecast of 375,000.
U.S. private employers added 325,000 jobs in December,
easily beating economists' expectations, a report by payrolls
processor ADP showed.
"The ADP number seems to punctuate the recent positive
economic data, but the rally it is causing in the dollar looks
to be limiting the gains in crude oil," said John Kilduff, a
partner at hedge fund Again Capital in New York.
U.S. crude stocks fell 4.4 million barrels in the week to
Dec. 30, industry group American Petroleum Institute reported
late on Wednesday, a sharply larger decline that the
200,000-barrel drawdown forecast in a Reuters poll.
The market is now awaiting weekly data from the U.S. Energy
Information Administration, which will come at 1600 GMT on
(Additional reporting by Florence Tan in Singapore and Robert
Gibbons in New York, editing by William Hardy)