June 26, 2009 / 3:39 AM / 10 years ago

Oil drops on Wall Street, Nigeria amnesty report

A gas station worker fills a car with fuel in Basseterre June 10, 2009. REUTERS/Eduardo Munoz

NEW YORK (Reuters) - Oil prices fell more than a dollar on Friday, pressured by weakness on Wall Street and news top African oil producer Nigeria would halt a battle with rebels in its energy-rich Niger Delta.

U.S. crude oil fell $1.07 to settle at $69.16 a barrel. London Brent fell 86 cents to $68.92 a barrel.

The losses came as U.S. equities markets were hit by a bout of profit-taking. Oil has moved in tandem with stocks for months as energy dealers look to equities for guidance on the economic outlook and its implications for ailing world oil demand.

“The oil market is following Wall Street right now,” said Daniel Flynn, an analyst with Alaron Trading in Chicago.

Adding to oil’s losses Friday was news that Nigerian security forces said they would observe a 60-day ceasefire in the Niger Delta under a federal amnesty program that four rebel factions said on Friday they might be willing to take part in.

Oil prices had risen sharply earlier, after the Movement for the Emancipation of the Niger Delta said it attacked the wellhead in Nigeria’s Afremo oil field late on Thursday.

Pipeline bombings, attacks on oil and gas installations and the kidnapping of industry workers over the past three years have prevented Nigeria from pumping much above two-thirds of its installed oil output capacity of 3 million barrels per day.

President Umaru Yar’Adua on Thursday offered a presidential pardon to gunmen in the Niger Delta from August 6 to October 4 to try to end years of unrest that have cost the OPEC member billions of dollars in lost revenue.

Shell said it was investigating reports of an attack on its Afremo platform B facility, which had been shut down following an attack on the Trans Escravos pipeline in February.

Additional reporting by Jennifer Tan and Christopher Johnson; Editing by Marguerita Choy

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