Oil prices slipped back marginally yesterday, after initially shooting up to their highest level since the war in Iraq began, as dealers reacted to fears about the ongoing war with Iraq.

The price of reference Brent North Sea crude oil for May delivery slipped 15 cents per barrel from the previous closing to $26.67 (€24.74) in late trading.

The fallback followed an early surge, which saw prices nudge the $27.50 mark.

New York's benchmark light sweet crude contract for May delivery slipped by 22 cents to $30.15 dollars a barrel in early trading, having leapt by $1.74 the previous day.

"One of the reasons why it pushed higher was the perception that the \ hike to Baghdad would take longer than expected," said Prudential Bache broker Mr Christopher Bellew.

"But the reason why it is coming back down is the realisation the oil fields, particularly in the south of the country, have been more or less secured now by the British and American forces."

Also raising consumers' hopes, he said, was the expected imminent resumption of Iraq's UN-run oil-for-food programme. The scheme was Iraq's economic lifeline during the tight international economic sanctions after the 1991 Gulf War. "So, although the war is going on, there may be a potential of getting some oil out," said Mr Bellew.