Oil prices slide lower- Iraq's oil industry is getting back on track

BBC News Oil prices have fallen sharply after new figures suggested that world stockpiles are bigger than originally thought.

The International Energy Agency, a body which monitors global oil supplies, on Friday said it was upgrading by 79 million barrels its previous estimate of stockpiles held by major consuming countries.

The upgrade, which raised the IEA's global supply estimate to 2.4 billion barrels, helped push US light crude prices down by $1.18, or nearly 4%, to $30.33 on Friday.

The decline partly reversed a price rally earlier this week triggered by fears that producers' cartel OPEC was planning to cut production levels.

A fall in oil prices is usually welcomed by major consuming countries, as cheaper energy costs help curb inflation.

Tight market

However, the IEA said the overall supply situation remains uncertain.

"The market is obviously better supplied than we thought as little as two weeks ago, but stocks are still low and fundamentals are still tight," said Klaus Rehaag, editor of the IEA monthly oil market report.

Oil prices have been boosted this year by disruption to Iraqi supplies during the US-led campaign to topple Sadam Hussein's regime.

A strike by oil workers in Venezuela, and social unrest in Nigeria, have also pushed the market higher.

Iraq, which accounted for about 4% of world exports before the war, clinched its first major sale of oil since the conflict ended on Thursday, and is expected to get back to full capacity later this year.

The OPEC countries, which aim to keep oil prices within a range of $22 - $28, will meet again on 31 July to assess how the resumption of Iraqi supplies has affected prices.

They may cut their output levels if they decide that prices have fallen too low.