Oil prices dip as bargain hunting ebbs
Oil prices edged down here on Tuesday after bargain hunting and supply-side concerns prompted by a hurricane in the Gulf of Mexico subsided.
The benchmark Brent North Sea crude oil for November delivery was selling for $30.90 a barrel, against $31.00 at the opening of trading and $31.08 at the close on Monday.
"There is no major news," said GNI analyst Lawrence Eagles. "There is a little bit of profit-taking."
The market was awaiting the weekly figures from the American Petroleum Institute on US crude oil stock levels, to be published on Tuesday.
Prices rebounded above $30 a barrel here on Monday after traders took advantage of the slide in prices to buy.
Momentum was also provided by the prospect of a shutdown of oil rigs in the Campeche Sound in the Gulf of Mexico after Hurricane Keith appeared to be heading for production facilities.
These concerns eased Tuesday after the threat of the hurricane faded.
"(Hurricane) Keith has now been downgraded to Tropical Storm status and poses no threat to the oil installations," said the GNI brokerage.
The market appeared unperturbed by renewed tensions between Iraq and southern neighbour Kuwait. Kuwait on Tuesday put troops deployed near the border with Iraq on maximum alert and reinforced them with elite troops to stop any bid by stateless Arabs to cross the frontier into the oil-rich emirate, officials said.
Meanwhile, analysts in London said the extra 800,000 barrels a day of crude oil promised by the Organisation of Petroleum Exporting Countries (OPEC) from October 1, expected to arrive next week, would bring further relief to prices.
Eagles said that the price of Brent crude oil "is still going lower -- especially as traders await the OPEC crude to come next week."
But Prudential Bache analyst Tony Machacek said that the market was not moving with great conviction.
"It could quite happily fall again," he said. – (AFP)
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