LONDON (AFP) - Oil prices rose slightly as markets turned their attention to upcoming estimates of US crude inventories amid worries that heating stocks are low ahead of the northern hemisphere winter, traders said.
Prices reversed earlier losses caused by news that offshore workers in Norway, the world's third-biggest oil exporter, had agreed to halt a four-month strike.
New York's main contract, light sweet crude for delivery in December, rose 11 cents to 54.65 dollars a barrel in early trading.
In London the price of Brent North Sea crude oil for delivery in December won 12 cents to 50.90 dollars a barrel in late deals.
The main US oil contract had hit an all-time high of 55.67 dollars a barrel on Monday while Brent reached a record summit of 51.90 dollars before fears of major disruption in Norway began to ease.
Prices were rising slightly amid the first "few estimates on US (oil) stocks", Base Financial trader Tony Machacek said.
Analysts said the closely watched release of a weekly US oil inventory report, due Wednesday, would have a big influence on the direction of prices.
"The focus remains on heating oil ahead of the winter period," analysts at the Sucden brokerage firm said.
Inventories of distillates -- mostly diesel and heating oil -- dropped by 1.9 million barrels to 119.0 million in the week to October 15, last week's US Department of Energy report showed.
Within that, heating oil inventories, in high demand in the northern hemisphere winter, slipped 500,000 barrels to 49.5 million.
"Prices could go stronger because of the cold weather in the States, so we are keeping an eye on the heating oil," said Lee Elliott, a trader at brokers GNI-Man Financial.
Crude prices had cooled earlier after Norway's offshore oil workers said they would return to work on Wednesday, putting an end to their months-long strike.
The announcement came a day after the Norwegian government announced that it intended to intervene in the conflict and impose arbitration on the two sides in order to prevent a total interruption of Norwegian oil production.
Offshore workers were expected to return to work as of midnight (2200 GMT) on Wednesday, said the OFS, the oil workers' union behind the strike.
Meanwhile producers kept up their efforts to calm volatile markets.
The president of the Organization of Petroleum Exporting Countries said global crude oil overproduction was now running at some 2.1 million to 2.5 million barrels per day (bpd), mostly from OPEC members.
Purnomo Yusgiantoro, who is also Indonesia's energy and mineral resources minister, said in Jakarta he had already called on members of OPEC to release all their supplies "to give a positive signal to the market".
Oil prices have been rising steadily on concerns over low US heating oil stocks and still-strong demand from China's booming economy.
But Prudential Bache broker Christopher Bellew said there was no transparency to China's energy needs.
"There is no real figure available as to what China is using and what China is storing.
"There is no indication of what the Chinese supply cushion is, and so no real understanding of what world demand really is," he added.
World oil prices have surged by about two-thirds since the start of this year.
Adjusted for inflation, however, they remain well below the levels reached in the wake of the 1979 Iranian revolution when prices surged beyond the equivalent of 80 dollars a barrel in today's money.
10/26/2004 - 18:12 GMT - AFP