LONDON (AFP) - World oil prices fell in volatile dealing as traders banked heavy profits following crude's surge above 54 dollars on a market nervous about supplies heading into the northern hemisphere winter.
The price of reference light sweet crude for delivery in November fell 41 cents to 52.10 dollars a barrel in electronic trading on the New York Mercantile Exchange.
New York's main oil contract pierced 54 dollars for the first time Tuesday, boosted by strikes in major producers Nigeria and Norway, before sliding as investors locked away fat profits.
It had touched an unprecedented 54.45 dollars, a record in the contract's 21-year history, before closing at 52.51 dollars.
In London Brent North Sea crude oil for November delivery lost 40 cents to 49.20 dollars in early deals on Wednesday. It had hit a record 51.50 dollars a barrel on Tuesday, before closing at 49.60 dollars.
"The oil market has been very volatile in the last couple of days. There was a big sell-off yesterday on profit-taking," Investec analyst Bruce Evers said.
"But prices are back up this morning which just proves that people are buying the dip," he said as prices staged a brief rally before falling back.
"They fear it might be the last chance to get cheaper crude. I still think we are going to see 60 dollars for light sweet crude before we see 50.
"The technicals are still very strong and there is plenty (of news) to keep the market occupied," Evers added.
In Nigeria, defiant union leaders took their nationwide general strike into a third day on Wednesday and gave no sign of faltering over their demand that President Olusegun Obasanjo find a way to slash fuel prices.
"We will continue our mobilisation today, the struggle is in the best interests of the people," declared Owei Lakemfa, chief spokesman of the Nigeria Labour Congress (NLC), the umbrella union leading the strike.
International markets have been watching the strike closely, concerned that if Nigeria's daily exports of around 2.5 million barrels per day are disrupted then oil prices could surge.
But so far both the unions and oil companies have said that exports have remained unaffected.
In Norway, the world's third-biggest exporter of crude, strike action by some 200 off-shore workers that has lasted since the beginning of July was set to widen Wednesday with another 25,000 barrels per day of production expected to be cut, shutting in a total of 55,000 bpd, or two percent.
Traders were meanwhile nervous ahead of the US Energy Department's weekly estimate of US commercial oil inventories following recent supply problems in the Gulf of Mexico caused by Hurricane Ivan which continue to affect output.
The data was set for publication on Thursday, a day later than usual owing to Columbus Day on Monday.
"Expectations are for a very small crude build of about 200,000 barrels and a decline of one million in distillate and 1.5 million in gasoline," Investec's Evers said.
"If the draws are bigger than that, the oil prices are going to take off again."
World oil prices have more than doubled from about 20 dollars a barrel in New York at the start of 2002, surging by about 65 percent since the start of this year.
Adjusted for inflation, however, they remain far below the levels reached in the wake of the 1979 Iranian revolution when prices surged to upwards of 80 dollars a barrel in today's money.