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SINGAPORE: Oil prices fell in Asia on Monday after
supply worries helped push prices to a record high last week.
New York’s main oil contract,
light sweet crude for August delivery, fell 41 cents to $144.67 a
barrel.
The contract hit an intra-day
peak of $147.27 before closing at $145.08, up $3.43, on the New York
Mercantile Exchange on Friday.
Brent North Sea oil for August
delivery eased three cents to $144.46. On Friday, Brent jumped as
high as $147.50, a new intra-day record, before settling up $2.46 at
$144.49 in London.
Investors were taking profits
after last week’s record surge but the decline was likely to be
brief as geopolitical tension in the oil-rich Middle East and unrest
in key producer Nigeria provided underlying support, dealers said.
“It seems clear that
geopolitics will continue to provide fuel for the seemingly
relentless rally, with Iran and Western nations still at a standoff
over the Islamic republic’s pursuit of a uranium enrichment
program,” said Linda Rafield, senior oil analyst at energy
information provider Platts.
Tehran insists its nuclear drive
is aimed solely at generating energy but some Western nations fear
it could be aimed at making an atomic bomb and have called for a
freeze of uranium enrichment.
Iran is the second biggest crude
producer in the Organization of the Petroleum-Exporting Countries
(OPEC) cartel. The country’s output is about four million barrels
per day.
OPEC has said the cartel would
not be able to replace Iran’s oil production if supplies were
halted in case of a war with Israel or the United States.
“A loss of Iranian barrels on
world markets would only tighten supply-demand balances further,”
Rafield said in a report.
Exacerbating traders’ supply
concerns is the ongoing unrest in Nigeria, where violence in the
southern delta region has already reduced the country’s total oil
production by a quarter since January 2006.
In the latest security incident,
Nigerian forces said on Saturday they were trying to track down the
kidnappers of two German construction workers in Port Harcourt, the
country’s oil hub.
Production in Brazil was
threatened as workers for the country’s state-run oil giant
Petrobras were to start a five-day strike on Monday. Brazil is the
world’s 12th largest crude producer, ahead of Nigeria.
Oil prices have almost doubled
over the past year and have soared since breaking through $100 at
the start of the year. The record prices have sparked protests
around the world amid fears for economic growth.
--AFP
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