Oil prices ended in negative territory yesterday after dealers took profits from a nearly $2 (€2.62) surge that had been triggered by export disruptions in Iraq and the North Sea.

US light crude settled down 10 cents to $45.33 a barrel, erasing gains that brought futures to $47.30 in the midst of the open-call session, their highest level since December 1st. London Brent fell 26 cents to $42.92 a barrel.

"There was meltdown late as the market could not push any higher than what it already tested ... prices broke down on technicals and profit-taking," said Steve Bellino, senior vice-president for energy risk management at Fimat USA.

Prices had jumped as Iraqi oil officials said that sabotage ahead of the country's January 30th elections had paralysed oil operations in the north of the country, forcing a suspension in refining while export flows remained idle.

"The Iraqi election and possibility of oil facility sabotage, approaching refinery maintenance/ turnaround and the possibility the upcoming OPEC meeting will endorse further cuts rallied the market," said brokers Refco in a report.

Buying interest was also supported after news that Saudi Arabia had cut crude allocations to major oil companies with global refining systems in February compared to January.

Trade sources said the cuts were smaller than those made in January from December, but declined to give precise numbers.

OPEC members said last week they had implemented the cartel's one million barrel per day supply cut from January 1st.

Dealers also remain concerned that a cold snap in the US Northeast, the world's biggest regional consumer of heating oil, could strain heating oil inventories that are 9 per cent below year-ago levels.