Oil prices held steady today, but were underpinned by lost Nigerian supplies following an oil pipeline explosion.
US February light crude was down three cents at $58.06 a barrel early this morning, while London Brent crude edged 4 cents down to $56.13.
The US January contract rose 64 cents before expiring yesterday after Nigerian authorities said unidentified gunmen were suspected to have used dynamite to blow up a major pipeline, cutting output from the world's eighth-largest exporter by 7 per cent.
"The Nigerian incident is a clear sign to buy. There had not been much similar market-moving news for a while and it's easier to move prices now because volumes and liquidity are low due to the holiday period," said Naohiro Niimura, vice president of Mizuho Corporate Bank's derivatives business unit.
Royal Dutch Shell, which operates the pipeline, said it had closed two oil fields and "deferred" 170,000 barrels per day (bpd) of production in the southern Niger Delta, which pumps almost all of the OPEC member's 2.4 million bpd production.
Oil prices were also supported by expectations US crude and heating fuel stocks fell last week.
US government data due later today is expected to show a crude draw of one million barrels for the week ended December 16 due to lower imports and higher refinery runs.
"Imports will be the key swing variable in this week's balance," said JPMorgan in a report. "We would be very surprised to see another very robust imports week."
However, crude stocks in the world's biggest energy consumer still appear comfortable at around 13 per cent above last year's levels.
Analysts also predicted distillate fuels, including heating oil, dropped by 400,000 barrels, but forecasts for warmer-than-usual weather for the first quarter next year have eased worries over heating fuel stocks and weighed on prices.
US heating oil demand is expected to be near normal this week as a cold spell eases, while total demand for all heating fuels is forecast to be less than 3 per cent below normal.
Oil prices have pulled back from a record above $70 in August after emergency stocks were released globally to offset lost US production in the wake of devastating hurricanes and as traders discounted the threat of demand spiking from a freezing winter.