US oil prices held near $31 a barrel yesterday after two explosions on Iraq's main northern crude pipeline dashed hopes that the war-torn country would reach its oil export target by year's end.
New York crude oil futures were 10 cents lower at $30.95 a barrel in a midday technical sell-off after hitting a session high of $31.60 a barrel, while North Sea Brent was down three cents to $28.78 a barrel.
"The market appears to be moving technically at the moment and correcting from Friday's levels, which appear to be overdone," said Mr Phil Flynn, analyst at Alaron Trading in Chicago.
Over the weekend, two blasts on the Iraq-Turkey oil pipeline closed the key northern export route. The pipeline had only last week resumed pumping since US-led forces invaded Iraq in March.
Iraqi engineers and US soldiers struggled to carry out repairs yesterday, but officials said it could be two weeks before the pipeline was working again.
A senior oil ministry source said Iraq would not meet its target to produce two million barrels per day (bpd) of oil by the end of the year if looting and sabotage persisted.
"If things are stable for two or three months straight, then we could reach our target. If they stay the same, it can't happen," a senior oil ministry official said.
The lack of Iraqi crude has led to persistently low oil stocks in the US, the world's largest consumer.
Supply concerns increased yesterday as ethnic violence flared in the southern Nigerian oil city of Warri for the third consecutive day. Energy firms operating in the region said oil output was not affected by the fighting but market dealers continued to worry that shipments from the world's seventh-largest oil exporter would be disrupted.
The violence in Nigeria is the most serious since March, when an ethnic Ijaw rebellion forced oil firms to evacuate key installations and shut down 40 per cent of oil output.
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