LONDON (AFP) - Oil prices fell back from record highs in response to an easing of tensions in Nigeria following a peace deal between rival gangs in the oil-rich Niger Delta, traders said.
The price of light sweet crude for November delivery fell 59 cents to 49.53 dollars a barrel in pre-opening electronic trading on the New York Mercantile Exchange.
In London the price of reference Brent North Sea crude oil for delivery in November slipped 62 cents to 46.00 dollars in early deals.
In New York crude oil futures closed above 50 dollars a barrel for the first time on Friday, as traders fretted about Nigerian oil production amid a threatened rebel uprising.
"The main news is the Nigerian one," said Lee Elliott, a trader with GNI-Man Financial.
"There is a small resolution. A deal has been struck between the rebels and government representatives in Nigeria."
Oil prices hit all-time peaks of 50.47 dollars in New York and 46.80 dollars in London on Tuesday of last week after an armed separatist group threatened war in the delta and urged oil multinationals and foreigners to leave the area.
"Prices are expected to remain volatile as the market monitors tensions in the Niger Delta," analysts at the Sucden brokerage firm said.
Nigerian military officials Monday announced a halt to operations in the delta.
"I would not say we have suspended operations, but we have been asked as you say in the military to observe a marking time or simply put, hold up action," Captain Onyeama Kanu, spokesman for the Joint Task Force (JTF) patrolling the Niger Delta region, told AFP.
"What this implies is that we will remain where we are, but have to be vigilant as we continue to monitor the situation," he said.
The government deployed troops to the region early last month to end gang violence in Port harcourt, the hub of Nigeria's oil industry, and its surrounding villages.
The two gangs fighting over oil in the region signed a ceasefire and disarmament agreement in Abuja on Friday after months of violence.
Nigeria is the world's sixth-largest exporter of crude oil and Africa's biggest producer, with proved reserves of some 27 billion barrels.