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Oil prices slip on profit-taking

Jan 17 2013 07:49 AFP
Oil barrel

Oil barrel (Picture: Shutterstock )

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Singapore - Oil prices fell in Asian trade on Thursday on profit-taking and the restarting of a British pipeline but an attack by Islamic militants on an Algerian gas field kept prices supported.

New York's main contract, light sweet crude for delivery in February shed 17 cents to $94.07 a barrel after the contract rose to its highest levels since September on data showing strong US demand.

A report by the US Energy Administration on Wednesday said oil stockpiles dropped by one million barrels in the week to January 11. Analysts had forecast a build of 2.1 million barrels.

Brent North Sea crude for March delivery was down 94 cents to $109.67 in volatile trading that saw prices see-sawing. The February contract expired on Wednesday.

Analysts said oil prices were supported by rising geopolitical concerns after Islamist gunmen killed two people and took 41 Western hostages on Wednesday in an attack on an Algerian gas field.

The gunmen said they were punishing Algeria, a member of the Organisation of Petroleum Exporting Countries (Opec), for opening its airspace to French warplanes hitting Islamists in Mali.

"The latest news of the attacks put a geopolitical risk premium into pricing," said Victor Shum, managing director of IHS Purvin and Gertz in Singapore.

The gas field, located close to the Libyan border, is jointly operated by British oil giant BP, Norway's Statoil and state-run Algerian energy firm Sonatrach.

Other analysts said the restart of a pipeline system in the North Sea also helped push Brent prices lower as it allayed supply concerns.

The pipeline, which services up to 27 oil fields, was shut on Wednesday following a platform leak.

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commodities  |  markets  |  oil
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