LONDON – Oil prices eased on Monday after rebels in Nigeria (search) withdrew a threat to target oil operations, but lingering concerns over stretched supplies ahead of winter kept prices close to $50.
U.S. light crude (search) eased 21 cents from Friday's record settlement price of $50.12 to settle at $49.91 a barrel, less than a dollar below record highs hit last week. London's Brent crude fell 41 cents to settle at $46.19 a barrel.
Prices eased as oil companies considered returning evacuated workers to Nigeria's oil-producing delta region following a peace deal signed by a rebel militia on Friday.
Despite concerns that the deal might not stick, the military appeared to be respecting an agreement not to launch attacks on rebel warlord Mujahid Dokubo-Asari.
The threat to Nigerian crude flows of about 2.3 million barrels per day (bpd) came at a time when producers are pumping almost at full tilt, leaving little slack in the system.
Prices have been bolstered by ongoing disruption to energy operations in the U.S. Gulf of Mexico following Hurricane Ivan (search).
Oil production in the U.S. Gulf of Mexico was still cut by 484,000 bpd, the U.S. Minerals Management Service said on Friday, nearly three weeks after production was first curbed ahead of the storm.
The Gulf of Mexico produces about 25 percent of U.S. oil and gas. U.S. consultancy PIRA Energy estimates at least 40 million barrels equivalent of oil and gas will be deferred by Hurricane Ivan.
"What gives added oomph is the slow rate at which production is being brought back on line," said analysts PFC Energy in a report.
The world's top economic leaders from the Group of Seven countries on Friday urged oil producers to pump more crude to bring down prices, which threaten to stunt economic growth.
"Oil prices are high and remain a risk," said a communique after talks between finance ministers and central banks from the G7 nations — Britain, Canada, France, Germany, Italy, Japan and the United States.
"So first, we call on oil producers to provide adequate supplies to ensure that prices moderate," the closing communique said. "Second, it is important consumer nations increase energy efficiency."
Kuwait's energy minister Sheikh Ahmad al-Fahd al-Sabah said on Monday he expects prices to start falling only in the second quarter of next year.
The Organization of Petroleum Exporting Countries (search), which controls more than half of the world's exports, is producing at a 25-year high close to 30 million barrels per day in a bid to cool prices.
Last week, top exporter Saudi Arabia said it was boosting production capacity to 11 million bpd in response to oil's record surge above $50. The kingdom is pumping 9.5 million bpd.