LONDON, July 23 - Oil prices ticked higher on Wednesday, correcting slightly from a five percent sell-off on Tuesday when hedge funds took profits as hopes were raised for a pick-up in Iraqi exports. U.S. light crude last stood 12 cents higher at $29.61 a barrel, after sliding $1.34 in New York on Tuesday. London Brent crude added 18 cents to $27.67 a barrel. Tuesday's decline was led by speculators pocketing profits from a rally that had pushed up crude more than six percent since the start of July, and nearly 25 percent since early May.
The rally was driven by delays in the restoration of Iraqi oil output owing to looting and sabotage of oil facilities and concern about U.S. crude oil inventories which stand more than 11 percent below year-earlier levels. Dealers said Tuesday's killing by U.S. forces of former Iraqi leader Saddam Hussein's sons Uday and Qusay raised expectations for improved security in the country's oilfields, allowing for a faster pick up in oil output. Iraq is planning to lift exports from its southern fields to 645,000 barrels a day in August from 450,000 bpd in July, still only a third of pre-war volumes. Baghdad has no plans yet to resume sales from its northern Kirkuk fields, where sabotage bombings have kept closed the pipeline north through Turkey.
Latest weekly data on U.S. inventories is due from the Energy Information Administration later on Wednesday. Energy analysts polled by forecast national crude stocks fell 1.3 million barrels in the week ended July 18 from a week earlier as Hurricane Claudette closed some production in the Gulf of Mexico. "We should get some support off those stats, but if they are neutral the funds will stomp on this thing," a broker said. However, a spate of refinery problems in the United States could offset some of the crude draw, traders said. Tuesday's threat from major Nigerian oil union Pengassan to go on strike on August 19 over differences on pay and continuing political instability in Venezuela are also helping support oil prices, traders said.///