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Prices for crude drop despite unrest in Nigeria

LONDON -- Oil prices retreated from highs reached last week due to balmy weather in the United States, but stayed above $62 a barrel yesterday as blasts tore through two oil company facilities in southern Nigeria.

Prices had risen steadily last week on renewed supply concerns as US inventories fell and after the Organization of Petroleum Exporting Countries decided to cut output in February.

But mild weather in the continental US and forecasts calling for more of it through the remainder of this month weighed heavily on heating oil and natural gas futures, dragging crude oil futures lower, too.

The decline was moderated by events in Nigeria, where the militant group the Movement for the Emancipation of the Niger Delta claimed responsibility for the blasts, warning before the explosions that it had planted three car bombs in the region of creeks and swamps where most of Nigeria's petroleum is pumped.

Two separate private security contractors, speaking on condition of anonymity citing prohibitions on speaking to reporters, said a blast hit an Agip residential compound in Port Harcourt and Shell oil reported an explosion at facilities in the city where many foreign oil workers live.

Nigeria is the world's 12th-largest oil producer and the fifth-largest supplier to the United States.

Light sweet crude for January delivery fell $1.22 to settle at $62.21 on the New York Mercantile Exchange. February Brent on London's ICE Futures exchange fell $1.36 to settle at $62.13.

Some analysts have suggested the post-OPEC announcement surge could be the impetus that brings oil prices back above $70 a barrel. In mid-July, crude surpassed $78 a barrel, but then dropped back.

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