World
 
|
Oil prices hit reverse gear as supply, geopolitical fears recede
AFP
NEW YORK
Petroleumworld.com 09 23 06
World oil prices slumped to fresh lows Friday with geopolitical and supply concerns fading further in the absence of major market-moving news.
New York's main contract, light sweet crude for delivery in November, slid 1.04 dollars to close at 60.55 dollars per barrel after an intraday low of 60.19 dollars.
In London, Brent North Sea crude for November delivery shed 93 cents to settled at 60.41 dollars per barrel after trading down as far as 60.15 -- a level not seen since early March.
Crude futures had staged a modest rebound on Thursday and earlier on Friday after ducking under 60 dollars per barrel in New York on Wednesday for the first time in six months.
"It seems that the market has found support around 60 dollars a barrel and is consolidating before the next major move," said Michael Davies, an analyst with the Sucden brokerage in London.
He added: "There is at the moment little bullish fundamental data to support (higher prices) as the supply and geopolitical situation continue to remain less of a concern."
Iranian President Mahmoud Ahmadinejad said Thursday that talks on his country's nuclear program were "on the right path" and also insisted that Tehran did not need an atomic bomb.
With new pressure mounting as Washington and its allies seek progress in efforts to reach a negotiated settlement with the Tehran government, Ahmadinejad's comments at the UN headquarters injected a note of moderation into the diplomatic battle.
In recent weeks, oil prices have slumped on easing tensions over major crude producer Iran, fading supply worries, a mild Atlantic hurricane season and oil cartel OPEC's pledge to maintain output, analysts said.
Additionally, there are signs of slowing in the US economy, which could lead to reduced demand, and indications that supplies of heating oil are ample going into the winter season.
"Mild weather and economic contraction have led to a reduction in overall energy demand in the face of swelling inventories, coupled with a lowering of geopolitical rhetoric," said John Kilduff at Fimat USA.
Kilduff said much of the speculative money has come out of the oil market recently, easing pressure on prices, but it remains unclear how much "hot money" is still invested in oil.
"If most of those positions have been abandoned, selling momentum should be significantly diminished next week," he said.
"If, however, there is a perception that significant speculative length remains, the march lower could continue to push prices under 60 dollars next week."
AFP 22 1940 GMT 09 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