LEGISLATION. The top Republican and Democrat on the Senate Finance Committee plan to introduce long-awaited China trade legislation tomorrow. A move that could siphon support from a controversial bill threatening China with tariffs. That is just a few days before the Senate is scheduled to vote on a bill threatening to punish China for its currency policies. Many US lawmakers and manufacturers believe China deliberately undervalues its yuan by 15 to 40 percent, which they say gives Chinese companies a big advantage over their American competitors. The United States has been pressing China for action on the issues and would like to see the yuan rise further against the dollar before a White House meeting between US President George W. Bush and Chinese President Hu Jintao on April 20. The Grassley-Baucus ?legislation will establish a more constructive framework to address currency imbalances that harm the US economy,? the senators? statement said. ?The bill will also address congressional concerns regarding trade enforcement, by focusing efforts to prioritize and respond to the most significant export barriers.? The legislation is aimed at facilitating ?a more positive engagement with our trading partners, including China, by encouraging compliance with the norms expected of economies that derive benefit from an open international trading system.? The authors of that legislation, Sen. Charles Schumer, a New York Democrat, and Sen. Lindsey Graham, a South Carolina Republican, indicated that they could decide to delay a vote on their bill. They said they would make a final decision after consulting next week with US Treasury Secretary John Snow and Senate colleagues.

NIGERIA. On Wednesday, a senior global maritime analyst at the US Office of Naval Intelligence, Charles Dragonette, said that Nigeria was no longer able to ensure security in the delta region where it pumps most of its crude. ?Oil production from the African country will hang precariously in the balance for some time.? Crude oil has traded in a range of $60-$64 this week as traders? focus shifted between ample US crude inventories and concern about real or threatened supply disruptions, including tensions over Iran's nuclear programme. Despite a surprise decline last week, US crude oil inventories stayed near seven-year highs, or 9 percent above those of a year earlier. ?A force majeure declaration by Eni on its Nigerian crude exports, strong technical support and some delayed reaction to yesterday?s US stocks data all pushed prices in the same direction,? said David Thurtell of Commonwealth Bank of Australia in Sydney, of Thursday?s price jump.

Traders also appeared to be shifting focus to expected lower refinery production in the US due to planned maintenance and unplanned outages. Oil prices are sensitive to any disruption to gasoline supplies from US plants ahead of summer, when demand usually peaks for the motor fuel.