OIL prices moved back into positive territory on Monday, as two oilfield closures in the North Sea renewed worries about global supply despite OPEC's weekend pact to raise output.
The Organisation of the Petroleum Exporting Countries (OPEC) at an emergency meeting on Sunday increased production limits by 1.5 million barrels per day (bpd), or 7 per cent, to compensate for six weeks of losses of strike-bound Venezuelan supplies.
Crude oil on the New York Mercantile Exchange settled 58 cents higher at $32.26 (€31.55) per barrel. In London, Brent crude broke through $30 a barrel to reach $30.20 a barrel, 53 cents up on the day.
Dealers said the crude rally was triggered by news from Norwegian State oil producer Statoil that two North Sea oilfields shut yesterday because of technical problems, cutting production by some 165,000 bpd - a minimal amount on a global scale.
"The fact that the North Sea output problem is supporting the market really shows how tight the physical crude supply is," said Mr Lawrence Eagles of GNI.
Fears that a US assault on Iraq may be only weeks away are helping support prices that late last month hit a two-year high of $33.65 a barrel for US crude.
Analysts said yesterday's earlier price fall had been contained because traders saw no short-term relief for crude inventories in the US that are near 26-year lows.
"It's just enough for the moment, but it's not going to push prices down much," said Mr Adam Sieminski of Deutsche Bank in London of the OPEC pact.
"I certainly see \ oil staying above $30 until the Venezuelan situation is sorted out," said Mr Paul Ashby, oil and gas analyst at ABN Amro in Sydney.
Middle East oil takes four to six weeks to reach US shores, while Venezuelan crude, which normally accounts for 13 per cent of US imports, arrives in about five days. - (Reuters)
