Oil workers began a five-day strike at 33 rigs early Monday, initially halting work at 12 of the rigs and reducing production by 400,000 barrels a day, according to the workers' union.

Work began resuming later in the day, however, and Brazil's Petrobras said in a statement that only two rigs were totally stopped. The company said its production in Brazil was reduced by some 136,000 barrels, or about 7 per cent.

The company said its contingency plan would 'guarantee the company's operational continuity and supply to the market.' The union, Sindipetro-NF, advised workers to peacefully turn over control of the rigs to the contingency workers as they arrive.

The union said it will continue the strike, however, until Petrobras addresses the workers' demands. They want Petroleo Brasileiro SA to give them an extra day off at the end of each two-week shift on the platforms.

The union summoned workers for a meeting late on Monday afternoon.

The union said in a statement that Petrobras had cut workers' access to the Internet on the platforms, keeping them from communicating with union leaders. It also said that some workers were kept from leaving one of the platforms.

The strike affected platforms in the Campos basin, which produces about 80 per cent of Brazil's oil. Last week, the threat of such a strike was cited as a factor in rising world oil prices.

On Monday, international oil prices settled above US$145 (S$196.03) a barrel as traders balanced concerns over supply and a stronger dollar against worries about the health of the US economy.

'Supply-side concerns in Brazil, Iran and Nigeria are putting a high floor on prices,' said Mr Victor Shum, an analyst with energy consulting firm Purvin & Gertz in Singapore.

The union, which represents some 7,400 oil workers, said it chose to ignore a court order prohibiting the workers from striking and providing for a daily fine of US$31,200.

Union leaders are also threatening a wider strike to demand a greater share of Petrobras' profits. The unions say that the company's profits have more than doubled since 2002 but that pay has not kept pace.

Petrobras produces about 1.6 billion barrels of oil a day, and is estimated to be the world's sixth largest oil company in terms of market capitalisation.

Company shares in late-afternoon trading were up 0.69 per cent to 40.9 Brazilian reals (US$25.5) on Sao Paulo's Bovespa stock exchange. -- AP