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Oil prices lower in Asia as tropical storm Ernesto downgraded
AFP
SINGAPORE
Petroleumworld.com 08 28 06
Oil prices were lower in Asian trade Monday after Hurricane Ernesto was downgraded to a tropical storm, reducing the threat to US oil facilities in the Gulf of Mexico region, dealers said.
A Russian statement describing as "premature" talk about imposing sanctions on Iran over a nuclear standoff also helped douse cold water on a heated market, they said.
At 3:00 pm (0700 GMT), New York's main contract, light sweet crude for October delivery was down 76 cents at 71.75 US dollars a barrel from its close of 72.51 dollars in New York on Friday.
Brent North Sea crude for October delivery fell 59 cents to 72.11 dollars.
Dealers said the market calmed down after Hurricane Ernesto was downgraded to a tropical storm Sunday and appeared not to threaten oil production platforms in the Gulf of Mexico.
"It looks like the path of the tropical storm is curving north and its strength seems to be weakening," said Tony Nunan, the manager for energy risk management at Mitsubishi Corporation in Tokyo.
The market remained cautious, however, on concerns the storm could regain strength, which prompted massive evacuations in Cuba and caused thousands of tourists in the Florida Keys to head to the US mainland.
Meanwhile, remarks Friday by Russian Defence Minister Sergei Ivanov that it was "premature" to talk about sanctions against Iran over its nuclear program helped ease some price pressures.
"There still is concern over the UN sanctions and the approaching deadline. However Russia's statement Friday acted as cold water ... taking the heat out of the market," oil market analyst Nunan said.
In line with a UN Security Council resolution, the United States and its European allies insist that Iran must stop enriching uranium by August 31 or face the threat of sanctions.
Analysts fear that sanctions on the Islamic republic will disrupt Iran's vital oil supplies. Iran is the world's fourth largest crude producer, pumping about 4.0 million barrels of oil per day of which around 2.7 million barrels are exported.
AFP 28 0707 GMT 08 06
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