Oil Prices Supported Above $46 a Barrel

Updated from 7:33 a.m. EST

By George Jahn

VIENNA, Austria -- Evidence that OPEC cutbacks were taking hold helped support oil prices above $46 a barrel Monday, with crude also getting support from new unrest in oil-rich Nigeria.

A dispute between Ukraine and Russia over gas imports and Israel's ground offensive in Gaza also kept tensions high, although analysts were split over how much the conflict in the Middle East is affecting markets.

Light, sweet crude for February delivery rose 2 cents to $46.36 a barrel in electronic trading on the New York Mercantile Exchange by midday in Europe. The contract rose Friday $1.74 to settle at $46.34.

Analysts at JBC Energy said in a research note that prices were supported by "increasing evidence that OPEC is adhering to its agreed production cuts and the announcement of the US government to add more oil into its strategic reserves."

Prices were also buoyed by the "latest news from Nigeria that saboteurs had attacked and partly destroyed part of a pipeline," the analysts said.

In the oil-rich Middle East, tensions were high as thousands of Israeli troops backed by tanks and helicopter gunships surrounded Gaza's largest city and fought Hamas militants at close range Sunday, as the offensive moved from airstrikes to artillery shelling and ground fighting in a bid to stop rocket fire on southern Israel.