LONDON, AP -Oil prices fell Tuesday as the market responded to a cease-fire in Lebanon that ended a month of fighting and eased concerns of a supply disruption, and as production partially restarted at BP’s Alaska field.
Light sweet crude for September delivery fell 63 cents to $72.90 a barrel in electronic trading on the New York Mercantile Exchange by late morning in Europe. September Brent at London’s ICE Futures exchange slipped 59 cents to $73.71 a barrel.
A day earlier, oil prices fell as much as $1.75 a barrel as the cease-fire began and investors responded to news that BP expects to maintain half of its production at a large oil field in Alaska despite a pipeline leak. BP had previously said it would have to completely shut down the nation’s largest oil field after discovering a leak nearly a week ago.
As of Monday, 150,000 barrels of crude and natural gas were flowing from the western side of the field. BP spokesman Daren Beaudo said there is no timetable in place, but the company intends to ramp production up to about 200,000 barrels or half of normal production.
Gasoline futures were down 1 cent to $1.9805 a gallon, and heating oil futures were down nearly 1 cent to $2.0075 a gallon. Natural gas futures dropped 3 cents to $6.877 per 1,000 cubic feet.
The cease-fire between Israel and Lebanon’s Hezbollah militants took effect early Monday, ending a month of violence that has killed more than 900 people.
The market had worried that the conflict might threaten world oil supplies if it spilled into other countries in the region, particularly Iran, OPEC’s No. 2 oil producer and a backer of Hezbollah. Those fears raised crude prices to a record $78.40 a barrel on July 14, two days after the fighting started.
Data released Tuesday by the Organization of Petroleum Exporting Countries confirmed the downward trend in prices. OPEC’s reference basket of 11 crude oils was quoted at $69.54 a barrel Monday, down 80 cents from Friday.
Prices remain supported by the standoff between the United Nations and Iran over its nuclear program as well as supply disruptions in Nigeria due to civil unrest.
Armed men snatched four foreign oil workers — two Britons, an American and a German — from a nightclub over the weekend amid widespread gun battles, continuing a spate of kidnappings in Nigeria’s southern oil hub.
Oil traders are also watching weather patterns for potential hurricanes that could strike Gulf of Mexico coast refineries, as well as signals for where fuel demand is headed.