Oil prices held above US$30 a barrel yesterday as a looming general strike in OPEC producer Nigeria raised fears of a reduced supply during the season of peak northern hemisphere winter demand.
US light crude futures slipped US$0.12 to US$30.29 a barrel after profit-taking by dealers on Tuesday. Oil prices have risen 12 percent since the Organization of the Petroleum Exporting Countries agreed to cut its production to 24.5 million barrels per day (bpd) at its Sept. 24 meeting.
OPEC's curbs will remove 900,000 bpd from the world market from Nov. 1 just as refineries in the Northern Hemisphere ramp up production of winter heating fuels.
The USEnergy Information Administration said on Tuesday the cut will likely prevent a large build in US oil stocks at the end of the year and keep crude oil prices at an above-average US$30 a barrel through winter.
US government data due yesterday will provide oil dealers with the latest snapshot on supplies in the US, which consumes a fifth of world oil demand of about 76 million bpd.
Analysts forecast US crude stocks to rise by 1 million barrels in the week to Oct. 3 as refinery processing rates dip due to seasonal maintenance.
Traders are keenly watching OPEC-member Nigeria, where the main trade union, the Nigeria Labor Congress, has called a strike for today against a government move to deregulate fuel prices.
"Worries about potential strike in Nigeria are really pushing the market," said David Thurtell, commodities strategist at the Commonwealth Bank of Australia.
Nigerian President Olusegun Obasanjo held consultations on Tuesday to try to head off the strike.
Nigeria's state oil company NNPC was preparing contingency measures to try to ensure normal output if oil workers join the strike, a Nigerian oil industry source said on Tuesday.
Iraq also remains a wildcard with the security of its crucial oil infrastructure still uncertain.
Colonel Robert Nicholson of the US Army Corp of Engineers in Tikrit said on Tuesday that the second of Iraq's two export pipelines, running from the north to the Turkish Mediterranean coast, was being repaired on schedule following sabotage and would resume operations in mid-October to pump pre-war capacity of 800,000 barrels a day of Kirkuk crude by the end of the year.
But analysts remain sceptical.
"I think the last four to five months have shown that as soon as they are repaired someone has sabotaged them again," Thurtell said.
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