Oil jumps on refinery strike

A two-day strike at a refinery in Grangemouth, Scotland, that began today has forced energy giant BP to shut down the neighbouring Forties pipeline which supplies 40 per cent of Britain's oil and gas.

It is the first time in more than 70 years that a strike has forced the closure of a British refinery.

The 48-hour strike over changes to pension plans has sparked panic buying of motor fuel in parts of Britain. It is due to end at 3pm AEST today.

"The supply losses from the Forties pipeline and Nigeria are fairly substantial and are likely to have large physical consequences, which could push crude prices above the psychological $US120 mark," said Sucden analyst Nimit Khamar.

The Forties pipeline, which depends on the Grangemouth refinery for power, brings more than 700,000 barrels of crude oil ashore daily and supplies Britain and international markets.

Nigeria, meanwhile, has also been hit by industrial action.

ExxonMobil's Nigerian affiliate said today a five-day strike by white-collar employees had caused output losses.

A spokesman for Mobil Producing Nigeria (MPN) said the company was attempting to open talks with the strikers. He would not disclose the volume of the loss. Its production is normally about 780,000 barrels per day.

Members of the Petroleum and Natural Gas Senior Staff Association of Nigeria began the strike on Thursday after negotiations on pay and working conditions with management stalled.

Nigeria has a daily output of 2.1 million barrels but unrest in the oil-rich Niger Delta has cut exports by a quarter since January 2006.

Last week, Shell said it had reduced output by 165,000 barrels per day following the sabotage of pipelines to the Bonny export terminal in southern Nigeria.