LONDON (AFP) - Red-hot oil prices cooled slightly, trading below 50 dollars in New York as fears of disruption to supplies from Nigeria eased after a rebel leader said he would meet the president.
The price of Brent North Sea crude oil for delivery in November fell 37 cents to 46.08 dollars a barrel in late morning in London.
On the New York Mercantile Exchange, the price of light sweet crude for November delivery dropped 29 cents to 49.61 dollars a barrel in pre-opening electronic trading.
Oil prices hit an all-time peak of 46.80 dollars in London on Tuesday and 50.47 dollars in New York after a separatist movement in Nigeria threatened to attack international oil facilities and personnel in the Niger Delta region.
However, the head of the Niger Delta People's Volunteer Force, Mujahid Dokubo Asari, told AFP by satellite telephone that he had been invited to meet President Olusegun Obasanjo in Abuja, though a presidential spokeswoman said she was unaware of any planned meeting.
"Prices are lower on the fact that the Nigerian rebel leader is to have some talks with the president," said Lee Elliott, a trader with GNI-Man Financial.
"I think basically that the delta move will be suspended if an agreement is made. They are trying to reach a deal. It looks like it could be close."
Asari said Obasanjo had sent an envoy to meet him on Tuesday and would send his presidential jet to take the separatist leader to the capital Abuja for a meeting on Wednesday.
"He invited me, I'll go there," he said. "We haven't declared war on Nigeria, but the Nigerian state has declared it. We have been fighting the Nigerian army since November 23 last year."
On Tuesday, Shell announced that it had been forced to shut down one of its flowstations in Nigeria, but along with Italy's Agip and Total of France, the company played down any real threat to its output of 2.3 million barrels per day in the African country.
Crude oil futures had smashed the 50-dollar barrier for the first time ever in after-hours New York deals on Monday.
Prices began retreating on Tuesday after OPEC kingpin Saudi Arabia undertook to increase oil production capacity by 1.5 million barrels per day (bpd) to 11 million within weeks.
The worries about Nigeria unnerved markets already fretting over low global oil inventories, unrest in Saudi Arabia, recent hurricanes in the Gulf of Mexico, violence in Iraq and the financial woes of Russian energy giant Yukos.
Meanwhile demand for oil is growing strongly, particularly in China.
"The spare capacity that the producers have, and in particular Saudi Arabia, has been whittled away and whittled away because of oil demand rising in unforeseen amounts, particularly in China and Asia and North America," said Robert Skinner, director of the Oxford Institute for Energy Studies.
"The capacity margin is down to a very thin cushion. So when anything happens, and you're that close to the wire, then it tends to send a much greater signal to the prices than it otherwise would," he said.
Markets were waiting nervously for weekly estimates of US commercial oil inventories from the US Energy Department due out later Wednesday.
Prices surged last week on news that US oil inventories tumbled to their lowest levels since February last week in the wake of Hurricane Ivan, plunging by 9.1 million barrels.