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Oil prices slide below 61 dollars
AFP
NEW YORK
Petroleumworld.com 12 28 06World oil prices extended losses on Wednesday as mild weather in the US led to expectations of a drop in US demand for heating oil, traders said.
Analysts said the market was unfazed by UN sanctions on Iran, which appeared to have no immediate impact on oil deliveries.
New York's main contract, light sweet crude for delivery in February, shed 76 cents to close at 60.34 dollars per barrel. At one point the benchmark contract fell as low as 60.25 dollars, a one-month low.
In London, Brent North Sea crude for February delivery fell 58 cents to 60.52 dollars per barrel in settlement trades.
Crude oil futures had already closed down more than a dollar on Tuesday as the market focused on mild US winter temperatures, limiting demand in the world's largest energy-consuming country.
"It's still the weather" that's causing prices to drop, said Calyon analyst Mike Wittner.
The heavy fall in prices since Tuesday has occurred despite the United Nations Security Council voting Saturday to impose sanctions against major oil producer Iran over development of its nuclear energy programme.
Before the UN decision, some analysts had argued that Iran could cut its oil exports in response to sanctions. However many market-watchers believe Iran would be unlikely to cut off its oil exports which are its major source of revenue.
"These particular sanctions are only the first round," said John Kilduff at Fimat USA.
"Sanctions did not cover oil exports and Iran made no specific threat to limit sales because of them. Supply disruptions will need to be seen as imminent for prices to break out of the current range."
Kilduff said there is also "continuing skepticism over OPEC's attempts to curb production."
He said the cartel's planned cuts from November 1 "have not reached anywhere near full compliance."
The market was also keeping a close watch over Nigeria, where a group of armed separatists in the oil region of the Niger delta have threatened to intensify attacks aimed at driving out foreign oil companies.
The region has seen an upsurge in violence over the past year by separatist fighters seeking a higher share of the country's oil wealth for the region's 14 million ethnic Ijaw people.
This has cut back Nigeria's normal production of 2.6 million barrels of crude per day by about 25 percent.
Nigeria is Africa's largest oil producer and the world's fifth biggest exporter, earning more than 90 percent of its foreign revenue from the sector.
"The market is now looking ahead to tomorrow's (Thursday's) weekly US (energy) inventory report, delayed by a day as a result of the Christmas holiday period,"
AFP 27 2038 GMT 12 06
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