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Oil prices retreat amid profit taking
AFP
NEW YORK
Petroleumworld.com 01 30 06Oil prices retreated Monday as traders locked in gains from last week's jump to 55 dollars per barrel despite cold weather in the United States and new concerns in crude producing nations Iran and Nigeria.
New York's main oil futures contract, light sweet crude for delivery in March, tumbled 1.41 dollars to close at 54.01 dollars per barrel.
In London, the price of Brent North Sea crude for March delivery shed 1.61 dollars to 53.68 dollars per barrel in settlement deals.
"There is profit taking today," said James Williams, analyst at WTRG Energy, noting that traders consolidated from last week's jump above 55 dollars.
"Over the last few weeks, prices have been swinging from highs to lows. A lot of this volatility is driven by the weather," he noted. "The market is essentially bearish but has been supported by the weather."
Oil prices have hovered around the 55-dollar mark for around one week after dunking beneath 50 dollars per barrel in New York two weeks ago amid a healthy supply picture.
Geopolitical factors were also moving to the fore again with recent developments in Iran and Nigeria, some traders said.
Some were tracking the news on Iran, which is a key member of the Organization of the Petroleum Exporting Countries.
Over the weekend, Iran gave conflicting signals on its disputed nuclear work with the Islamic republic's atomic energy agency denying Tehran had started to install 3,000 centrifuges to enrich uranium.
The UN Security Council has imposed sanctions to pressure Iran to stop uranium enrichment, which can produce fuel for civilian nuclear reactors but also the explosive core of atom bombs.Tehran says its nuclear programme is a peaceful effort to generate electricity, but the United States claims Iran is hiding work on developing atomic weapons.
Events in Nigeria -- Africa's biggest crude producer -- also lent prices some support, analysts said.
"Geopolitical tensions seem to have once again caught the market's attention amid heightened violence in Nigeria, that has once again increased concern about more supply disruptions," said Sucden analyst Michael Davies.
Nigeria, which derives more than 95 percent of its foreign exchange earnings from oil, lost more than half-a-million barrels a day last year to unrest in the Niger Delta.
"Participants can't help but take notice of increasing violence in the world's most important producing region," said John Kilduff at Fimat USA."At this particular moment, there should be enough supportive factors to prevent prices from pulling back too far and keep the short term trend modestly higher."
AFP 29 2036 GMT 01 07
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