Oil: Prices steady ahead of US holiday

LONDON - Oil futures were steady above US$73 ($120) a barrel on Monday as American drivers shrugged off high pump prices and took to the road in large numbers.

London Brent crude traded 22 cents lower at US$73.29 a barrel by 1700 GMT, after touching a high of US$73.99 a barrel earlier in the session.

The market in US light crude was closed for a holiday. It gained 41 cents to US$73.93 on Friday after an eight-day rally.

Drivers are expected to travel in record numbers during the US Independence Day period, after the US economy grew in the first quarter at the fastest rate in 2-1/2 years.

"Bullish data on the refined product side has supported the latest mini-bull run in the oil price," said investment bank Citigroup in a research note.

Prices are less than US$2 away from Brent's record peak of US$74.97 reached in early May, and US crude's US$75.35 in late April.

Analysts do not expect any big price movements until trading on the New York Mercantile Exchange (Nymex) resumes on Wednesday.

"Prices won't move much until the US market opens after the holiday, when we will see an upward momentum," said Keith Sano, manager for Sumitomo Corp.'s commodities business.

Saudi Arabia's top oil body on Sunday blamed a refinery crunch for high oil prices and said there was enough crude supply to meet demand.

"The council realises that the current rise in oil prices stems from various factors such as the lack of advanced refining capacity, and is not the result of any shortage in crude supply," said Saudi's High Council for Oil and Mineral Affairs.

Tensions in Iraq, Iran and Nigeria have been among the main drivers behind a near 25 per cent rally in Brent prices this year.

But Iraq's oil industry had some good news on Monday after months of facing a bleak prospect for the revival of the battered sector.

Oil exports in July could match a post-war high of 1.8 million barrels per day if Baghdad can keep crude flowing from northern oilfields to the Ceyhan terminal on Turkey's Mediterranean coast, an industry source told Reuters.

Tankers have been loading again at Ceyhan after repairs to the pipeline, crippled by repeated insurgent attacks, and Iraqi exports in June were at their highest since October 2004.

Iraq has had to rely on a southern export route via Basra on the Gulf to supply markets with crude and earn vital revenue for reconstruction.

- REUTERS