Oil prices rose in early trading on Monday following reports of the latest attack on a pipeline in Nigeria. Italian oil firm Eni confirmed that one of its Nigerian pipelines had been hit by an "act of sabotage", losing an unspecified amount of production. Militants are attacking facilities in Nigeria's main Niger Delta oil region to demand that a greater share of the wealth stays in the local area. US light crude was up seven cents to $62.84 in early Far Eastern trading. "I think prices are reacting again to the situation in Nigeria, with Eni reporting attacks on its pipeline," said Andrew Harrington, resources analyst at ANZ Bank in Sydney. Nigeria, Africa's biggest producer of crude, has seen a 20% cut in output since militants launched attacks on foreign oil companies at the start of this year. The other two main factors keeping oil prices high are the ongoing security situation in Iraq and the nuclear stand-off with Iran that could ultimately result in trade sanctions against Tehran. However, early afternoon trading saw oil prices down slightly amid news of reduced demand forecasts for 2006 and larger US crude oil inventories. The Organization of Petroleum Exporting Countries (OPEC) reduced its forecast for 2006 by 110,000 barrels a day. Crude oil dropped 37 cents to $62.40 a barrel in New York by Monday afternoon, while Brent crude fell 26 cents in London to $63 per barrel.