Oil rebounds as Chavez returns

Workers protest outside state-owned oil company Petroleos de Venezuela last week

LONDON, England (CNN) -- Oil prices rebounded on Monday after pro-OPEC president Hugo Chavez was reinstalled in Venezuela after a failed military coup last week.

Crude prices were also helped by a renewed call by Iran for an oil embargo against Israel and its allies.

In midday London trading, Brent crude for May delivery rose 32 cents to $24.61 a barrel, regaining most of its losses from last week.

Chavez was forced out of office on Friday by the country's military leaders after protests against his leadership left. At least 10 people were killed and more than 80 injured.

The resignation of Chavez -- a strong supporter of the Organisation of the Petroleum Exporting Countries and its push to raise prices -- weakened prices as concerns eased over reduced supplies from Venezuela.

RESOURCES Comparison: Venuezuelan oil production and exports

Venezuela, a member of the OPEC, is the world's fourth-largest oil exporter and the second biggest source of oil to the United States.

Exports from Venezuela had been cut off almost entirely as workers at Petroleos de Venezuela went on strike in mid-March to protest Chavez's boardroom shake up at the state-owned oil company.

Chavez came under increasing pressure last week as business and labour leaders launched a general strike to protest his handling of the dispute.

Oil prices had reached a high of $27 a barrel last Monday after Iraq said it was freezing exports for 30 days or until Israel ended its military offensive in the West Bank. That was followed by initial support by Iran for the Iraqi embargo against the West and a call for other Muslim producers to join the protest.

But prices began slipping back after the world's largest exporter, Saudi Arabia, assured markets that it would provide enough oil to meet global demand.

Analysts expect oil prices to remain volatile with the threat of supply disruptions likely to continue for some time.

"The oil market will remain uncertain in the next few months," Peter Nicol, an analyst at ABN Amro, told CNN.

However, he said prices this year should be around the $24 a barrel average seen in 2001. "The wider impact [of these disruptions] should be muted."

OPEC has cut output by 5 million barrels a day, or nearly 20 percent, since January 2001 to buoy up prices as demand faltered due to the economic downturn.

In March, the cartel agreed to extend output curbs until at least June, when ministers are due to meet to review market conditions.