High oil prices / Nigerian strikes and Delta militants - International help required ?

At 10.40 am in London, benchmark Brent crude contracts for August delivery were down 29 cents at US$ 71.55 per barrel (it hit hit a ten-month high of US$72.25 on Monday) . New York crude contracts for July delivery, which expires today, were down 27 cents at US$ 68.83 per barrel. Whilst the market is awaiting US reserve figures for gas there are rising concerns about today's general strike called in Nigeria.

The strike - said to test the will of the new president Umaru Yar'Adua relates to a series of fiscal measures pushed though in the last days of the presidency of Olusegun Obasanjo, who stepped down last month.

The price of petrol was increased from 65 naira (51 US cents - 25 pence) a litre to 75...The government has now reportedly offered to reduce this to 70 naira (55 cents). This measure was designed to reduce domestic demand as Nigeria has to import fuel because the refineries cannot cope and are badly run down.

This “indefinite strike” is scheduled to start today and includes both major union groups in the country. Whilst this is a major concern recent attacks in the Niger Delta may signify more serious concerns over supplies.

Gunmen overran an ENI oilfield pumping station on Sunday and the company said 27 people were being held hostage at the facility, which normally produces about 40,000 barrels per day of oil.

U.S. oil company Chevron has cut its Nigerian oil output by 42,000 bpd after an invasion at a flow station by armed youths, a company spokesman said on Monday.

It is reported that some 756,000 bpd, or 25%, of the country's output (which generates 90% of the country's income) is shut because of militant attacks. Before the election which brought Mr Yar'Adua to power, the militants stepped up their violence, although there was a lull during the actual voting.

The attacks resumed shortly after the polls with more kidnappings and bombing of oil pipelines, leading to a 25% cut in production and ultimately the current spiking in global oil prices.

The BBC Online report that Benjamin Akande, who is a native Nigerian but is now a US-based academic expert on Nigeria (***?) told them:

"The truth of the matter is that Nigeria may need outside help to deal with this situation. The US, the EU, or the AU could come into this conversation and help resolve this issue," Mr Akande suggested.

Watch Mr Akande, Dean of Business Management , Webster University, St Louis talk about gas prices on Fox TV here.