World oil prices rebounded strongly Monday from four-month lows as U.S.-led forces met heavy resistance in the campaign in Iraq, dashing hopes for a quick end to the war.

Substantial production closures in Nigeria because of ethnic unrest in the oil-rich Niger Delta also helped spur prices higher, traders said.

U.S. light crude jumped $1.75 to $28.66 a barrel, after falling 25 percent over the previous week. In London, benchmark crude was up $1.74 at $26.09 a barrel.

"The oil market has been behaving as if peace has broken out, but the level of Iraqi resistance so far suggests the war could drag on with consequences for oil prices," said Adam Sieminski, oil analyst at Deutsche Bank.

"The oil market has become complacent about the war, its risks and the risks of the post-war situation," said Paul Horsnell, oil analyst at J.P. Morgan.

Last week, dealers were optimistic the war would prove swift after early U.S. and British military gains in the southern Iraqi oil fields and as crude exports from Iraq's Gulf neighbors flowed unhampered.

But over the weekend, Iraq paraded U.S. prisoners of war on television and inflicted its heaviest casualties so far as resistance stiffened as U.S. troops drew closer to Baghdad.

A speech by a defiant Iraqi President Saddam Hussein broadcast on Monday helped boost the buying of oil futures.

Despite resistance, U.S. and British forces tightened their grip at the weekend on Iraq's southern Rumaila oilfields and exporting terminals and began to assess how to restart exports.

Iraq was ranked seventh among crude exporters before the war, exporting about 1.8 million barrels per day (bpd), under U.N. supervision, from output of 2.5 million bpd.

The northern oil hub of Kirkuk has yet to be secured by U.S. and British forces.

OIL WELLS

Fears that Iraqi soldiers might repeat the sort of damage to oil wells seen in their retreat from Kuwait in 1991 have so far proven unfounded. The United States has estimated that fewer than 10 Rumaila wellheads have been sabotaged.

"There could still be some issues in the north or a counter-attack in the south, but the worst case scenarios, such as torching the oilfields, are not playing out," said Raad Alkadiri of PFC Energy in Washington.

OPEC exporters, especially Saudi Arabia, have raised output in the past few months to cool prices that touched a 12-year high of $39.99 for U.S. crude at the end of February.

In Nigeria, oil companies have been caught up in worsening clashes in the Niger Delta between ethnic groups, whose battle for a greater share of the country's oil wealth is turning into a virtual insurrection against the Nigerian state.

Just over 800,000 barrels a day of the 2.2 million barrels pumped daily by Western oil companies in Nigeria has been closed in after a series of bloody clashes.

Nigeria is also one of the top six oil exporters to the United States, sending more than 560,000 bpd last year.