Oil down to near $100 in light holiday trading

Oil prices fell to near $100 a barrel Monday in light holiday
trading as investors awaited a decision on OPEC output quotas and mulled
the impact of Middle East political tensions.

By early afternoon
in Europe, benchmark oil for July delivery was down 44 cents to $100.15 a
barrel in electronic trading on the New York Mercantile Exchange. The
benchmark contract added 36 cents to settle at $100.59 on Friday.

In London, Brent crude for July delivery was down 36 cents to $114.67 a barrel on the ICE Futures exchange.

Markets in the U.S. are closed Monday for the Memorial Day holiday while it is a bank holiday in England.

On
Monday, security forces killed anti-government protesters in Syria and
Yemen, the latest instances of political violence that has swept the
oil-rich region this year.

The Libyan rebels’ finance minister,
Ali Tarhouni, said Sunday that the oil fields located in the eastern
half of the country under opposition control will resume production once
it’s safe to send workers to the fields. He said he did not expect
security to be established soon.

Before the uprising against
Moammar Gadhafi’s regime, Libya produced about 1.6 million barrels per
day, but output has ground to a halt during the revolt that began Feb.
15.

Some analysts expect the eventual return of Libyan crude
production will help push oil prices lower. Capital Economics said it
sees Brent trading below $90 by the end of 2011 as political upheaval in
the Middle East and North Africa, which it estimates has added about
$20 to the price of crude, eases.

“It seems likely that the
stalemate in Libya will be resolved, one way or another, in the coming
months,” Capital Economics said in a report. “In the meantime, there is
no sign of significant disruption to supply from other oil producers,
notably Saudi Arabia.”

Traders also are awaiting next week’s
meeting in Vienna of the Organization of the Petroleum Exporting
Countries, wondering whether the group will heed calls for boosting its
crude output.

“While the view was unanimous in the past that OPEC
would leave production quotas unchanged, some analysts now expect an
increase,” said analysts at Commerzbank in Frankfurt. “OPEC would
thereby signal a compromise toward the International Energy Agency,
which had called more loudly than in the past for an increase of
quotas.”

Oil has dropped from a 30-month high near $115 a barrel on May 2.

In
other Nymex trading in June contracts, heating oil fell 1.66 cents to
$2.9739 a gallon and gasoline dropped 1.7 cents to $3.075 a gallon.
Natural gas futures rose 4.5 cents to $4.563 per 1,000 cubic feet.

 

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