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Oil higher on Nigerian attacks, cold weather in US

AFTER trading lower since hitting a 15-month high last month, oil prices headed back toward US$75 per barrel yesterday.

Analysts blamed the jump on a variety of factors, including attacks on an oil pipeline in Nigeria, persistently cold weather in the U.S. Northeast and a stronger stock market.

Benchmark crude for March delivery rose US$1.54 to settle at US$74.43 a barrel in trading on the New York Mercantile Exchange.

Large stockpiles of oil in the United States and elsewhere were also keeping prices from rising too high, analysts said.

"The global picture of surplus spare capacity ... is however unchanged and will continue to act as a cap to any strong rally," said Olivier Jakob of Petromatrix in Switzerland.

Adding to the glut was the lack of discipline among members of the Organization of Petroleum Exporting Countries, who continued exceeding negotiated output levels.

"With OPEC compliance slipping - just 55 percent of agreed cuts in January - it may be a while before the supply overhang is absorbed," said a report from KBC Energy Economics in Britain.

Prices were also supported by attacks on oil installations in Nigeria. Although the Movement for the Emancipation of the Niger Delta, the main militant group, said Saturday it was ending an October cease-fire agreement with the government, it denied involvement in the rupture of an important Royal Dutch Shell PLC pipeline.

In other Nymex trading in March contracts, heating oil rose 4.19 cents to settle at US$1.9549 a gallon and gasoline added 1.87 cents to settle at US$1.9321 a gallon. Natural gas rose 30.3 cents to settle at US$5.434 per 1,000 cubic feet.

In London, Brent crude rose US$1.65 to settle at US$73.11 on the ICE futures exchange.


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