  |
Oil prices ease on Israeli halt of air strikes on Lebanon, US growth data
AFP
SINGAPORE
Petroleumworld.com 07 31 06
Oil prices were weaker in Asian trade Monday, extending losses as a temporary halt to Israeli air attacks on Lebanon helped take some of the risk premium out of the market, dealers said.
They said the 48-hour suspension of Israeli air strikes in southern Lebanon, after heavy loss of life in the town of Qana, helped encourage hopes that a cease-fire could be arranged.
At the same time, news of a slowdown in second quarter US growth figures, which saw prices fall sharply in New York Friday, pointed to possibly weaker demand going forward, taking some pressure off prices.
For the moment, however, US gasoline (petrol) demand remains strong due to the summer holiday driving season and this will likely continue to provide some support.
At 10:20 am (0220 GMT), New York's main contract, light sweet crude for September delivery, was down 24 cents to 73.00 dollars a barrel from 73 dollars in late US trades Friday when it had fallen 1.30 dollars.
Brent North Sea crude for September fell 17 cents to 73.22 dollars.
Dealers said the suspension of Israeli air strikes in southern Lebanon helped ease some concerns over crude supplies from the oil-rich Middle East.
"It has gone up so much on the Lebanon issue," said Tony Nunan, manager for energy risk management with Mitsubishi's international petroleum business in Tokyo.
"I think the market needed a correction ... It's a move in the right direction," he said of the 48-hour suspension of Israeli air strikes.
Nunan said, however, that the slide in prices was expected to be temporary as there were still many issues at work, including strong gasoline demand in the United States.
"There's a bit of concern over gasoline in the United States," said Nunan. "I think it's going to get bought up again; we're not out of the woods yet," he said.
Over the past four weeks, US demand for gasoline has risen by 1.8 percent from the same period in 2005, the US Department of Energy (DoE) said in its latest report issued Wednesday.
Gasoline statistics are under heightened scrutiny because of peak US demand as many Americans hit the roads for their summer vacations.
The DoE added Wednesday that gasoline stocks dropped by 3.2 million barrels to 211 million in the week to July 21, while the market had expected no change.
US crude oil inventories were stable at 335.5 million barrels. Analysts had forecast a fall of 500,000 barrels.
The ongoing violence in southern Lebanon has triggered worries the fighting could spread to major crude-producing nations in the Middle East such as Iran, pushing oil prices to all-time highs above 78 dollars earlier this month.
AFP 31 0246 GMT 07 06
Copyright ©2006 AFP. All Rights Reserved.
Your
feedback is important to us!
We invite all our readers to share with us
their views and comments about this article.
Write to editor@petroleumworld.com
Any
question or suggestions, please write to:
editor@petroleumworld.com
Best
Viewed with IE
5.01+
Windows
NT 4.0, '95, '98 and ME +/ 800x600 pixels