[Goldfisch]

June 19, 2004, 12:08AM

Oil prices rise as supplies tighten

NEW YORK — World oil prices rose in cautious trading Friday as dealers were skeptical over a planned partial resumption of Iraq's exports at the weekend, four days after sabotage attacks cut off supplies.

Prices still remained broadly supported by fears that global oil production is nearing its limits, with the Iraqi halt and a Norwegian strike exacerbating the problem.

Also affecting trading was the death of an American contractor who was beheaded in Saudi Arabia. It raised the prospect that foreign workers will leave the world's biggest oil exporter.

At the New York Mercantile Exchange, light, sweet crude settled up 29 cents at $38.75 a barrel, adding to Thursdays $1.14 surge driven by a wave of speculative fund buying.

Gasoline for July delivery rose 0.99 cent to $1.197 a gallon. Heating oil fell 0.55 cent to settle at $1.0253 a gallon. Natural gas fell 6.2 cents to $6.52 per thousand cubic feet.

London's Brent crude was unchanged at $36.21 a barrel.

Crude prices have fallen by more than 10 percent from record highs two weeks ago as speculative players cashed out of oil because of swelling U.S. inventories and OPEC's promise to pump extra crude this summer.

But simmering fears over Middle East oil security amid increasing violence in Iraq and Saudi Arabia were revived this week by a trio of pipeline sabotage attacks that brought Iraq's 1.6 million to 1.8 million barrels per day of exports to a halt on Tuesday.

An oil official in Iraq said Friday they hoped to resume limited supplies of about 700,000 barrels a day today, assuaging fears that the outage could drag on for more than a week.

The latest gains were also fueled by an unplanned shutdown at a gasoline producing unit at Exxon Mobil's 538,000 barrel per day refinery in Baytown, which raised fears of a summer supply crunch during the peak holiday driving season.