LONDON, Mar 13 (Reuters) Oil prices edged below a barrel on Monday as the biggest stockpiles of crude for nearly seven years outweighed concern refined products could run short.
U.S. crude for April delivery fell 17 cents to .76 a barrel, while London Brent crude eased three cents to .80.
Prices for U.S. light crude fell nearly four dollars, or close to six per cent, last week, pressured by the Organization of the Petroleum Exporting Countries' decision to continue to pump almost flat-out despite the fact crude inventories have reached their highest levels since May 1999.
Prices then fell to less than a barrel and prompted OPEC to rein in production.
This time the situation is very different, analysts say, as a rally that drove prices to a record of .85 at the end of August was driven by demand that is still high.
Another difference is that product supplies are strained by heavy refinery maintenance in the United States and specification changes to introduce cleaner burning fuels.
''Maintenance seems to be extremely high and there are spec changes in the United States,'' said Deborah White of SG CIB Commodities in Paris. ''It's not that there are absolute shortages of products, but there is a concern about how much there is going to be.'' OPEC President Edmund Daukoru, who is also Nigeria's oil minister, said OPEC had decided to roll over supply quotas to avoid sending ''the wrong signal'' and pushing prices out of control.
But he said the producers' group would continue to monitor supplies closely.
Production has already been cut following militant attacks in Nigeria.
Daukoru said last week around 75 per cent of the lost output should be restored in around two weeks, though Shell, the biggest foreign operator in Nigeria, said it was continuing to shut in 455,000 barrels per day and could give no indication of when supplies would be back to normal.
Concerns about possible supply disruption because of the dispute between the West and Iran over its nuclear ambitions have also provided support for prices.
The U.N. Security Council is expected to issue a statement this week urging Iran to halt uranium enrichment, but stopping short of sanctions.
Iran said on Sunday a proposed compromise to allow it to make nuclear fuel in Russia was no longer being considered, ruling out an option that could have averted an escalation of the dispute.
REUTERS SD PM1853