Tuesday, October 20

Oil prices lower in Asian trade as Greece debt concerns outweight supply disruption worries

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SINGAPORE: Crude prices were lower in Asian trade yesterday as concerns over the unresolved debt crisis in Greece outweighed worries about supply disruptions in the Middle East and Africa, analysts said.

New York’s main contract, West Texas Intermediate crude for delivery in March, was down 54 cents at US$97.30 a barrel in the afternoon.

Brent North Sea crude for March delivery shed four cents to US$114.54.

“Oil prices remain affected by strong bullish and bearish factors,” said Ken Hasegawa, energy desk manager at Newedge brokerage in Japan.

While concerns over a supply disruption in Africa and Iran remained strong, prices were being weighed down by the dragging talks on a Greek sovereign debt deal, Hasegawa told AFP.

Athens had been in talks with the European Union, the International Monetary Fund and the European Central Bank on further action needed to unlock a new eurozone rescue deal worth 130 billion euros (US$171 billion) pending since October, but no agreement had yet been reached.

Pressure was also high for an agreement with private lenders to wipe out part of the 350-billion-euro Greek debt, as Athens faced loan repayments of 14.4 billion euros on March 20.

Meanwhile, a Nigerian militant group on Sunday said it had destroyed an oil pipeline in the Niger delta – the home region of President Goodluck Jonathan – a week before governor’s elections were to be held there.

The Movement for the Emancipation of the Niger Delta (MEND) also threatened more attacks in future to “reduce Nigerian oil production to zero and drive off our land thieving oil companies”.

Nigeria, which was still reeling from the after-effects of widespread protests in January caused by the government’s scrapping of fuel subsidies, had also been under pressure from a series of Islamic militant attacks.

Africa’s most-populous nation produces more than two million barrels per day and is a key supplier of crude to the US and the European Union.

Traders were also closely monitoring the situation in the Middle East, as tensions between Iran and the West remain high, analysts said.

Crude producer Iran, which was already under four rounds of United Nations sanctions, vehemently denied its nuclear programme masks an atomic weapons drive as the West alleges, and insisted that it is for civilian purposes only. — AFP