New York – Oil prices plunged by more than $2 a barrel Tuesday on hopes that the inauguration of a new president in OPEC member Nigeria would contribute to a stable supply from the Niger Delta region.
A formal meeting over the weekend between U.S. and Iranian officials also soothed traders’ concerns about a potential conflict between the two countries.
Light, sweet crude for July delivery dropped $2.05 to settle at $63.15 a barrel on the New York Mercantile Exchange. Before the long weekend, U.S. crude oil climbed more than $1 to $65.20 Friday.
Monday, there were no floor trade and no closing price in the U.S. because of the Memorial Day holiday.
Brent futures for July lost $1.58 to close at $68.15 a barrel on London’s ICE Futures exchange.
“We’re pulling the plug. It’s certainly a big drop, a material drop in price,” said Tim Evans, an energy analyst at Citigroup Global Markets. “Basically, the new president is calling for Nigerian unity. He’s waving the olive branch, and it makes us feel more secure regarding Nigerian oil supplies.”
Umaru Yar’Adua, 56, was sworn in Tuesday as the new Nigerian president, replacing Olusegun Obasanjo.
