LONDON, July 16 (AFP) - Oil price edged higher Friday on markets nervous about tight supplies and violence in Iraq.
The price of Brent North Sea crude oil for delivery in September, the new reference contract, rose 37 cents to 37.85 dollars per barrel in early deals here.
New York's light sweet crude benchmark August futures gained 21 cents to 40.98 dollars a barrel in pre-opening electronic deals.
Traders said movements in London were largely technically driven owing to the expiry of the August contract a day earlier.
In the background worries about low US oil inventories, instability in Iraq and the wider Middle East and growing demand for crude continued to lend support, analysts said.
"It's typical post-expiry trade with prices raising 20-30 cents to catch up with yesterday's close," said GNI-Man Financial trader Paul Goodhew.
"On the news front it's pretty quiet.
"There won't be a lot of activity from the funds today as they have been buying heavily since the beginning of the week. Before the weekend they will be quiet and defend their long positions, unless there is news of supply disruptions," he said.
Prices rose sharply on Wednesday after government data showed a tightening of supplies in the United States, notably a fall of 2.1 million barrels in crude oil stocks in the week to July 9.
A fire at a pipeline connecting the oil fields of the northern Iraqi city of Kirkuk and the Turkish port of Ceyhan on Thursday added to market worries.
Officials from the Northern Oil Company (NOC) said Friday that the blaze, which halted crucial oil exports, had been extinguished.
Meanwhile insurgents fired mortars at a pipeline connecting the oil fields of the northern Iraqi city of Kirkuk and the Turkish port of Ceyhan but missed their target, Ahmad Hassan Afif, a security official at NOC, told AFP.
"The pipeline is still shut and repair work will start on Saturday morning," he said, without indicating when it would be in working order.
Traders were also digesting OPEC's decision a day earlier to cancel its planned meeting next week but go ahead with a planned output increase of 500,000 barrels per day (bpd) from August 1.
In the end the announcement was seen as having little impact on prices.
The move was "viewed as irrelevant since the 500,000 bpd quota hike has already been implemented, with additional output already scheduled for August," Barclays Capital analysts told clients.