World oil prices fell back late yesterday amid reports of an uprising against President Saddam Hussein in Iraq's second-largest city of Basra.
US light crude fell 66 US cents to $28.00 (€26.23) a barrel after a $1.75 jump on Monday. London Brent crude dropped $1.14 a barrel to $24.95.
Oil fell 25 per cent last week as traders bet on a short war with little damage to Iraq's oil industry. Before the conflict, Iraq exported about 1.7 million barrels per day (bpd) to the 77 million bpd world market.
But confidence in a quick war waned after the weekend as US and British forces suffered casualties and saw slower progress.
"While there are few who doubt the outcome of the conflict in Iraq, given the technological superiority of coalition forces, Iraq's oil infrastructure escaping damage is not as certain," said Mr John Kilduff of Fimat bank in a report.
Meanwhile, a series of bloody clashes in Nigeria forced closure at the weekend of just over 800,000 bpd of the 2.2 million bpd produced by Western oil firms in the OPEC nation.
"It's very serious. It's not a little local disturbance."
OPEC said on Monday it could make up any shortfall in supply from Nigeria, OPEC's fifth-largest producer. It has also pledged to make up for the disruption to Iraqi exports but now has only the slimmest of spare capacity cushions.
