LONDON (AFP) - World oil prices backtracked from record highs as the United States prepared to draw on its emergency reserves to ease supply strains caused by Hurricane Ivan.
The price of benchmark Brent North Sea crude oil for delivery in November dipped 23 cents to 44.90 dollars a barrel in early deals in London, a day after reaching a new record of 45.75 dollars.
New York's main contract, light sweet crude for delivery in November, eased 20 cents to 48.26 dollars a barrel in pre-opening electronic trading.
"The market has shrugged off news that the US is loaning a bit of oil to some refiners," said Prudential Bache trader Tony Machacek.
He said the oil was only a limited amount but would help the refineries that have been affected by hurricanes to continue to operate at a time when refined product stocks are low.
The Energy Department said Thursday it was preparing to release "a limited quantity" of crude oil from the US strategic petroleum reserve (SPR) to ease shortages resulting from Hurricane Ivan.
Investec Securities oil analyst Bruce Evers described the release as a "very, very small quantity", with one company receiving 100,000-200,000 barrels and another between one and two million barrels.
"In the overall context of American tight supply and demand balance, it is not much. So I don't think it has an impact on prices.
"And it will be only temporary. The oil companies, when they've sorted themselves out, will have to repay the oil," said Evers.
Approximately 670 million barrels of oil are currently stored in the reserve, a series of four underground caverns located along the coast of the Gulf of Mexico. The SPR is expected to reach its full capacity, 700 million barrels, in 2005.
Prices surged earlier this week on news that US oil inventories tumbled 9.1 million barrels to their lowest levels since February last week in the wake of Hurricane Ivan.
A host of factors in addition to the recent hurricanes was also supporting prices, said Evers.
"The demand is still very, very strong. Stocks are very low, and the lack of heating oil stocks is becoming a worrying factor ahead of the winter.
"The geopolitical factors are still there. A pipeline going to the Basra refinery was blown up yesterday in Iraq. Yukos remains very uncertain, with a lot of rumours going around and talks behind close doors," he said.
Russian President Vladimir Putin said there were no plans to nationalise embattled oil giant Yukos but state firms could bid for assets of the company if they are sold to pay off the company's multi-billion-dollar tax debts.
Yukos is facing the forced sale of its main production asset, Yuganskneftegaz, which accounts for 60 percent of the firm's oil output, to pay off billions of dollars in back tax demands by the state.