LONDON, Sept 16: Oil prices edged slightly lower on Monday, hit by profit-taking following a dramatic rally the previous session and comments from Saudi Arabia that it will cooperate in a UN-sanctioned attack on Iraq.

Reference Brent North Sea crude for November delivery slipped nine cents to $28.58 a barrel, having on Friday closed at its highest level in a year.

In New York, the light sweet crude October contract surged 96 cents to $29.81 a barrel on Friday.

It’s pretty quiet: it’s just drifting lower in the absence of any exciting news over the weekend, said ED and F Man trader Graham Flint.

Flint said that Friday’s rally had left the market looking technically overbought.

It looks like it’s due a bit of a dip, he said.

GNI analyst Lawrence Eagels said news that Saudi Arabia may allow the United States to use airbases within its borders for an attack on Iraq was also weighing on the market.

If Saudi (Arabia) cooperates in military issues, then there is no reason to suspect that it will not do the same in economic matters, Eagles said.

That reduces considerably the risk of a shortage of oil if an attack on Iraq takes place, Eagles added.

Saudi Arabia Foreign Minister Saud al-Faisal announced Sunday that Riyadh would cooperate in a US-led attack on Iraq if the United Nations Security Council gave the green light.

Several other Arab countries also appeared to move towards accepting what appears to be the increasing inevitability of a new war unless Iraq caves in and allows unhindered UN arms inspections.

Eagles said a meeting of the Organization of Petroleum Exporting Countries (Opec) in Japan on Thursday was providing traders with an additional focal point.

All signs suggest Opec will not provide any extra oil at this meeting, but we would suspect that it will indicate its willingness to provide more oil should prices remain high or move higher, Eagles said.

Opec secretary general Alvaro Silva said Friday the market was adequately supplied with sufficient oil stocks to meet demand in the coming months.

Meanwhile, the Middle East Economic survey reported in its Monday edition that Opec members produced 2.06 million barrels per day (bpd) over quota agreements in August.

Production by the 10 member states, minus Iraq, rose by 240,000 bpd last month to 23.760 million bpd, the industry newsletter said. —AFP