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Oil prices fall below 74 dollars
AFP
NEW YORK
Petroleumworld.com 07 26 06
Oil prices swung lower Tuesday as traders banked profits amid hopes of a ceasefire between Israel and Hezbollah militants despite continued Middle East violence, analysts said.
Crude futures had risen earlier Tuesday, supported by violence in the Middle East, a big oil pipeline leak in Nigeria, and amid concerns over refinery shut-downs in the United States, dealers said.
New York's main contract, light sweet crude for delivery in September, closed down 1.30 dollars at 73.75 dollars per barrel.
In London, Brent North Sea crude for September delivery settled down 1.33 dollars at 73.28 dollars per barrel.
"There is a growing urgency to try to stop the violence in Lebanon one way or another and perhaps that's the reason why the prices came off. But I don't see a lot of significance in today's movement," said Carl Calabro, an analyst at PFC Energy.
The violence continued Tuesday, with Israel pounding south Beirut, ending a 24-hour lull that coincided with a visit to the region by US Secretary of State Condoleezza Rice.
Loud blasts echoed across the Lebanese capital and television pictures showed a huge cloud of smoke rising from the southern suburbs, a Hezbollah stronghold.
There was no immediate word on casualties, while the air raids followed Hezbollah rocket attacks on northern Israel, including the city of Haifa, which killed a teenage girl and wounded four other people.
Traders said growing perceptions that a peace accord might be brokered had also contributed to the price drops.
Concern that the violence in Israel and Lebanon could spread to major crude-producing nations, such as Iran and Syria, had pushed oil prices to all-time highs above 78 dollars earlier this month.
Earlier Tuesday, prices had risen above 75 dollars per barrel in London and New York.
"Crude futures gained ground on concerns about conflict in the Middle East, refinery outages and supply disruptions in Nigeria," Sucden analyst Michael Davies said.
Royal Dutch Shell said that a leak in an oil pipeline in southern Nigeria last Friday had cut its output there by 180,000 barrels per day.
"A total of 180,000 barrels a day has been temporarily shut in and we don't know when it will be back," a Shell spokeswoman told AFP Tuesday.
Shell has so far failed to uncover the cause of the leak to the Sambarth-Karkrama pipeline in the oil-rich Niger Delta region.
News of the leak comes as Nigeria was already experiencing a cut of about 20 percent in its oil output, owing to militant unrest in the Niger Delta.
Nigeria is the biggest oil producer in Africa and the world's sixth-biggest exporter of crude.
Crude futures had closed higher on Monday, partly owing to concerns over gasoline or petrol supplies in the United States as a result of refinery outages.
Cooling towers at a ConocoPhillips refinery at Wood River, Illinois, have been temporarily shut down after suffering damage in severe storms.
And the giant Amway refinery in Venezuela, which exports fuel to the United States, is set to be shut down for up to seven months after a fire last week, trade sources said.
AFP 25 1928 GMT 07 06
Copyright ©2006 AFP. All Rights Reserved.
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