Oil Boom Profits

Oil rose toward $61 a barrel on Friday after Britain's Royal Navy said it was deploying forces to counter a possible threat to the world's largest oil export terminal in Saudi Arabia.

Exports from Ras Tanura were continuing as normal, industry sources said. The navy issued a warning in a statement to merchant shipping as a precautionary measure after receiving intelligence of a possible threat.

"Coalition, Saudi and Bahraini units in the general vicinity are focusing on presence and deterrence in the approaches to Ras Tanura," the statement said.

U.S. crude was up 30 cents at $60.66 a barrel by 1338 GMT, rebounding from an earlier decline. London Brent gained 31 cents to $61.08.

Industry sources said the deployment was routine. Ras Tanura has a capacity of 6 million barrels per day, according to the U.S. Department of Energy.

Prices were also supported by OPEC's agreement last week to lower supply, just as winter fuel demand in the northern hemisphere is set to rise.

"Basically, you have OPEC cutting and seasonal increases in crude demand going forward," said Mike Wittner of investment bank Calyon. "There will be uplift for prices."

Earlier on Friday, oil had eased on expectations that U.S. crude inventories would rebound from a drop last week that was caused by a temporary closure of the nation's biggest oil port.

OPEC CUTBACKS

The Organization of the Petroleum Exporting Countries last week agreed to cut supply by 1.2 million barrels per day to stem a sharp slide in prices from a peak of $78.40 hit in July.

On Thursday, Libya and Kuwait joined the United Arab Emirates, Saudi Arabia and Iran in disclosing production cuts.

Iran's oil exports will drop by 176,000 bpd as OPEC's second largest producer implements its share of a deal to cut output, Iran's oil minister said on Friday.

"This amount will be from the actual production of the country and considering the fact that domestic consumption is fixed, Iran's oil exports will decrease by this amount," Oil Minister Kazem Vaziri-Hamaneh said, Iran's student news agency ISNA reported.

Kuwait will cut oil output by 100,000 bpd from November 1, while Libya will make a supply cut of 72,000 bpd. Traders are now watching for actual cutbacks in supply allocations to oil firms.

Nigeria's shipments have remained steady despite its pledge to cut output by 100,000 bpd, while the UAE may fail to meet its 100,000 bpd cut, traders said.

Some OPEC members have said the exporter group may need to trim supply further at its next meeting, scheduled to take place in Abuja, Nigeria on December 14.