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Oil dips after Nigeria-led surge, looks to US data

Written by: Staff

TOKYO, Feb 22 (Reuters) Oil prices dipped toward a barrel on Wednesday, shedding some gains from a major disruption to Nigeria's exports as dealers braced for another increase in already robust U.S. inventories.

U.S. crude futures for April delivery traded 27 cents lower, or 0.43 percent, to .47 a barrel. London Brent crude shed 20 cents to .40 a barrel.

The U.S. contract soared .45 gain on Tuesday after Nigerian militant attacks at the weekend shut in a fifth of crude supply from the world's eighth-largest oil exporter.

Fears over Nigeria and continued anxiety about Iran's nuclear programme have helped oil prices rebound about 8 percent from a 2006 closing low of .65 a barrel a week ago, which followed a hefty increase in weekly U.S. crude and gasoline stocks.

Gasoline inventories already at their highest in six years are expected to have risen again last week by 800,000 barrels, while crude stocks were expected to have climbed by 700,000 barrels, a Reuters poll of nine analysts showed. S] ''With bearish U.S. statistics expected, traders have found a reason to take profit from a sharp gain since late last week on news about Nigeria and Ecuador,'' said Nahiro Niimura, the vice president of Mizhuho Corporate Bank's derivatives unit in Tokyo.

The data from the U.S. Energy Information Administration (EIA) will be released on Thursday, a day later than usual because of the Presidents Day holiday on Monday.

NERVOUS EYE ON NIGERIA, IRAN While supply data will take the spotlight on Thursday, dealers are keeping an anxious eye on developments in Nigeria, where militants holding nine foreign hostages vowed to continue attacks in a campaign to get more local control of the Niger Delta's vast oil wealth.

Royal Dutch Shell has shut in 455,000 barrels per day (bpd) of output and evacuated hundreds of staff from oilfields as a result of the violence.

Concerns also remained over Iran, which has promised not to hold back its vital oil exports as a weapon in its nuclear dispute with the West but has shown few signs to strike a deal over a Russian proposal to enrich uranium for Iran.

And South America's fifth-largest producer Ecuador added to the unease as it stopped pumping oil through the OCP, the country's main private oil pipeline, due to local protests a day after a brief outage to state firm Petroecuador's exports.

High prices coupled with ample inventories present a dilemma for OPEC ahead of its policy meeting in two weeks.

Some members, including Kuwait and Iran, have said the market will be oversupplied by 2 million bpd in the second quarter, suggesting the cartel should cut supply. But prices in the s may make a cut politically tricky.

Reuters SI DB1012

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