Oil prices down in Asian trade

January 17, 2013 | 14:42

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

New York's main contract, light sweet crude for delivery in February shed 37 cents to $93.87 a barrel in the afternoon 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 $1.07 to $109.54 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 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 targeting Islamist militants 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.

AFP

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