SINGAPORE (AFP) – Oil prices fell on profit-taking in Asian trade Monday after the end of the two-week standoff between Britain and key crude producer Iran over 15 captured British sailors, dealers said.
They said however that concerns over tight motor fuel reserves in the United States had limited the decline.
At 2:50 pm (0650 GMT), New York’s main oil futures contract, light sweet crude for delivery in May fell 42 cents to 63.86 dollars a barrel from 64.28 dollars a barrel in late US trades Thursday.
Brent North Sea crude for May delivery fell 33 cents to 67.91 dollars.
Both markets were closed for the Good Friday holiday.
“Before a long weekend… traders tend to be more cautious and hold long positions. Now that it is after the long weekend, we see a bit more downward correction,” said Victor Shum, an analyst with energy consultancy Purvin and Gertz in Singapore.
But he added that “pricing remains strong relative to what it was before the seizure” of the British naval personnel, who returned to London last Thursday following their release by Tehran.
Shum added that tightening gasoline supply and prevailing geopolitical risks are keeping crude prices from dipping too much.
US gasoline (petrol) reserves plummeted by five million barrels last week, against market forecasts of a drop of just 300,000 barrels.
Falls in US gasoline inventories in the first quarter have raised concerns over motor fuel supply ahead of the peak driving season which starts next month when many Americans hit the roads for vacation.
The United States is the world’s biggest energy consumer.
“Pricing remains robust because the market finds support in the tightening product markets and there could be higher demand for crude oil as US refineries are coming out of spring maintenance,” Shum said.
“There are also lingering geopolitical concerns like Iran’s nuclear ambition and Nigeria’s upcoming general elections which may spur civil unrest and threaten supply disruptions.”
Two Turkish engineers were kidnapped on Friday night in volatile oil-rich southern Nigeria, underlining the continued risks to the country’s oil industry.