NEW YORK (AFP) - International oil prices saw new sharp falls as improved reserves and expectations of weaker demand cheered markets.
New York and London oil markets saw prices at a two month low. A barrel of light sweet crude on the New York Mercantile Exchange for December delivery fell 76 cents to close at 46.11 dollars a barrel.
In London, Brent North Sea crude for January delivery, the new benchmark contract, shed 75 cents to 42.29 dollars in late deals.
Hopes that US oil reserves will rise when the latest official Energy Department and American Petroleum Institute reports come out on Wednesday have boosted the market.
US "crude oil inventories have been rising for the last few weeks and people expect a new rise in tomorrow's report," said Jason Schenker, an economist at Wachovia Securities in New York.
"The warm weather also continues to weigh on prices," he added.
Schenker said markets were hoping for a rise of 1.5 million barrels of crude oil in US reserves.
"Forecasts for warmer weather in the US northeast that should lighten heating oil and natural gas use, plus news that the planned general strike in Nigeria had been suspended after the government reduced domestic fuel prices, helped push crude oil down," Barclays Capital analysts wrote in a note.
"Warmer weather forecasts in the US, along with warmer weather expected in the US by the end of the week, will push prices down to 40 dollars a barrel (in London) by Friday," predicted GNI-Man Financial trader Lee Elliott.
Last week's US report showed that crude oil inventories had increased by 1.8 million barrels to 291.5 million in the week to November 5, helping to offset an eighth weekly drop in stockpiles of heating oil.
Elliott noted prices have also fallen now that Nigeria's general strike over domestic fuel subsidies has been "definitely called off," but said he would continue to monitor the situation.
Nigeria's central labour movement and a coalition of civil society groups decided Monday to suspend a nationwide general strike just hours before it was due to begin at midnight.
The move came after the government made an 11th-hour bid to avert the strike -- which had already been deemed illegal by a court ruling -- ordering a temporary increase in fuel subsidies and an immediate cut in pump prices.
In Iraq saboteurs blew up an oil and a gas pipeline in the northern Iraqi region of Kirkuk overnight after top militant Abu Musab al-Zarqawi purportedly encouraged such attacks, officials said on Tuesday.
"Two pipelines were targeted last night at about 11:00 pm (2000 GMT), one carrying oil and the other carrying gas," said Lieutenent Colonel Marwan Omar, who belongs to a government force charged with securing such installations.
The two pipelines carried oil and gas to the Baiji refineries southwest of Kirkuk.
11/16/2004 - 21:38 GMT - AFP