LONDON (AFP) - World oil prices steadied as Saudi Arabia said it was ready to boost output, offsetting worries about low stocks of US heating oil ahead of the northern winter and the threat of strikes in Nigeria.
New York's main contract, light sweet crude for delivery in December, lost 12 cents to 55.05 dollars a barrel in electronic trading.
In London the price of Brent North Sea crude oil for delivery in December also fell 12 cents to 51.44 dollars a barrel in early deals.
Crude prices had swung higher late Tuesday, matching a record close in New York of 55.17 dollars, as winter supply fears overcame relief at the end of industrial action in oil-rich Norway.
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.
Traders were nervous ahead of the Energy Department's weekly estimate of US commercial oil inventories following recent supply problems in the Gulf of Mexico caused by Hurricane Ivan.
"Prices are pretty firm. All eyes are on the US stocks data," GNI-Man Financial trader Lee Elliott said.
"We are expecting a draw (of one million barrels) in distillate stocks which obviously would be bullish" for prices, he added.
Analysts at the Sucden brokerage said the inventory data, to be released later Wednesday, was expected to "show tighter fuel supplies".
"Depressed US Gulf oil production and refining activity following hurricanes a month ago have contributed to heavy stock draws on products in recent weeks," they added.
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.
Saudi Arabia, the world's largest oil producer, said it was ready to raise production if asked but argued that supply shortages were not currently an issue.
"We are willing to increase production right now if anyone needs the oil," Adel al-Jubeir, foreign policy advisor to Crown Prince Abdullah, told CNBC financial news television Tuesday.
He said Saudi Arabia could supply an extra 1.5 million barrels per day of oil immediately to customers.
"We are doing everything we can to ensure that the world has adequate supplies of crude oil. We frankly do not see a shortage. We just see prices being driven by speculation and by psychology."
Meanwhile in major oil producer Nigeria, a coalition of trade unions and pro-democracy groups issued Nigeria's President Olusegun Obasanjo with an ultimatum Tuesday, warning him to cut fuel prices this week or face a renewed nationwide general strike.
"By Sunday the coalition is going to meet in Lagos and if by that time the issue has not been resolved satisfactorily by Mr President, then the coalition will announce a date for the second phase of the general strike and mass protest," said Adams Oshiomhole, the president of the Nigeria Labour Congress.
Earlier this month the NLC and its allies staged a four-day nationwide stoppage in protest at a recent hike in the pump price of petrol and diesel, bringing economic life in Nigeria's major cities to a halt.
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.
10/27/2004 - 11:01 GMT - AFP