LONDON, Jan 31: IPE Brent futures fell on Friday on signs of increased exports from strike-ridden Venezuela but volume was low as dealers awaited US President George W. Bush’s talks on Iraq with British Prime Minister Tony Blair.

The March contract stood 21 cents off at $31 a barrel on volume of about 12,619 lots.

US light, sweet crude futures for March stood 47 cents down at $33.38 while IPE February gas oil was up 50 cents at $277.25 a ton.

“The last few days have seen the funds liquidating front positions on both markets. With the increase in Venezuelan exports and output hikes from OPEC and Mexico there’s a lot of crude around,” said Fimat Banque’s Mark Head.

The market rose 22 cents on Thursday after the United States signalled that its latest diplomatic drive on Iraq would be shortlived and was likely to end within weeks.

Traders said dealings could remain thin until a key intelligence presentation by US Secretary of State Colin Powell next Wednesday on Iraq’s weapons.

And while weapons inspections bosses Hans Blix and Mohamed ElBaradei considered an Iraqi invitation to return to Baghdad, dealers monitored Friday’s talks between Bush and Blair for fresh developments on Iraq.

Oil production in Venezuela continued to recover despite a two-month-long strike.

Striking oil workers put crude output at around 1 million barrels per day (bpd) on Thursday.

But Ali Rodriguez, head of the state oil company Petroleos de Venezuela (PDVSA), said on Friday the figure was over 1.5 million, well up from lows of 150,000 bpd in December but still only half normal levels.

He said output could reach 1.8 to 1.9 million bpd next week as four Orinoco upgrading plants are restarted.—Reuters