Oil held just over $68 today, but eased from four-month highs after top exporter Saudi Arabia vowed to plug any supply gap from Nigeria and said OPEC was unlikely to cut production when it meets next week.
Prices have shot up around $10 since December as consumers fret over outages from militant attacks on oil facilities in Nigeria and rising tension over Iran's nuclear programme.
Adding to uncertainty over energy supply, explosions on Sunday knocked out the main pipeline in southern Russia that supplies gas to Georgia and Armenia.
US light sweet crude was down 23 cents at $68.25 a barrel this evening, after briefly touching $69.20, its highest since early September. London Brent crude was down 16 cents to $66.27 a barrel.
Investors' attention today turned again to OPEC member Nigeria, the world's eighth largest crude exporter, where a month-long campaign of sabotage continued with an attack on an oil platform operated by Agip, a unit of Italy's ENI. Over 220,000 barrels per day (bpd) of Nigerian crude is still shut in and militants are threatening more violence.
Tension over Iran's nuclear ambitions, one of the main factors behind the nearly 20% surge in oil prices over the past month, continued to mount today. Iran will resume industrial-scale uranium enrichment if it is referred to the UN Security Council over its nuclear standoff with the West, Iran's chief nuclear negotiator Ali Larijani said.
US and European Union leaders suspect Iran, the world's fourth largest oil exporter, of seeking to build atomic bombs under the cloak of a civilian nuclear energy programme. Iran has denied the allegation. Analysts fear the dispute could lead to a disruption in Iran's crude exports of 2.4 million bpd.
Meanwhile, gas supplies from Russia, disrupted at the start of the year by a pricing dispute with Ukraine, also grabbed the spotlight after explosions knocked out the main pipeline to Georgia. Exports to Europe were already running below normal due to bitterly cold conditions in Russia.
