LONDON – Oil prices steadied on Friday, attempting to end a five-day rout as an end to a lengthy uprising in the Iraqi city of Najaf was offset by renewed pipeline attacks.
U.S. crude inched 8 cents higher to $43.18 a barrel on the New York Mercantile Exchange (search), and London's Brent crude settled 31 cents stronger at $40.64 a barrel.
Despite Friday's tiny rise, prices are down 13 percent from last week's peak, when speculators began taking profits after prices failed to breach $50.
Crude prices are still up nearly 40 percent since the turn of the year on strong global demand and uncertainty in the Middle East.
In Iraq, Shiite fighters left the Iman Ali mosque in the holy city of Najaf as the bloody uprising was ended by a peace agreement between the government and the rebel cleric Moqtada al-Sadr.
Despite the peace deal, confidence in the reliability of Iraq's crude exports remained shaky after renewed sabotage attacks on the country's oil infrastructure on Thursday and Friday.
Oil prices had risen earlier after saboteurs attacked two pipelines linking a main oil field to export storage tanks in the south of the country.
Exports from the southern terminal were running at 1.5 million barrels a day, down from two million bpd earlier in the week, although it was unclear whether the fall was a result of the sabotage attacks or normal tanker movements, shipping agents said.
Iraq halted exports via Turkey from its northern oilfields on Friday, having filled storage tanks to close to capacity, industry sources said.
Swiss trading company Vitol was the first company to book an oil tanker to lift the Kirkuk crude for the first time in three months, ship brokers said.
Saboteurs on Thursday attacked eight pipelines linking a southern oilfield to a pumping station near Basra.
Turmoil in Iraq has underpinned oil price strength in recent months, adding to worries over a lack of spare production capacity from other OPEC nations and flourishing demand growth in China and India.
A U.S. government report on Wednesday showing higher-than-expected gasoline inventories at the tail end of the summer vacation season in the world's largest energy consumer also knocked prices lower.
U.S. summer driving demand ebbs after Labor Day weekend (search) in early September, signalling a period of lower consumption ahead of the northern winter heating season.
Analysts say that while prices have been due to correct lower they may not fall far as global demand growth is running at the fastest rate in 24 years.
OPEC (search) has signalled that it plans to increase production to combat high oil prices, saying output would reach 30.5 million bpd in September from 29.6 million bpd in July.
But a leading oil shipping analyst added on Thursday that crude oil shipments from OPEC were expected to have declined 380,000 bpd in August, countering expectations they would increase.
"The projections are probably not far from the truth in terms of production and exports and are mostly down to interruptions in Iraqi oil supplies," said Roy Mason of consultancy Oil Movements.
"If it's confirmed by other agencies like the IEA (International Energy Agency (search)) and other analysts then it runs counter to what we actually thought was going on in August, namely that exports were climbing," he said.
OPEC will meet on Sept. 15 in Vienna to discuss a possible further increase in production quotas.