Oil down in Asian trade
New York's main contract, West Texas Intermediate for delivery in February was down 49 cents to $101.07 in morning trade, while Brent North Sea crude for February delivery declined 11 cents to $112.95.
"Pressures
concerning
the
debt
situation
in
Europe
is
offsetting
the
bullish
factor
of
geopolitical
tension
in
West
Asia,"
said
Victor
Shum,
senior
principal
at
Purvin
and
Gertz
international
energy
consultants
in
Singapore.
French
and
German
leaders
are
set
to
meet
in
Berlin
today,
kicking
off
a
week
of
high-level
talks
aimed
at
laying
the
groundwork
to
tame
the
euro
zone
crisis.
The talks are being held amidst growing strategic differences between the two European powers over plans to introduce a financial transaction tax in the European Union.
Traders meanwhile are also keeping a close watch on the situation in the strategic Strait of Hormuz in West Asia and its impact on the flow of oil supplies, analysts said.
Iran has threatened to close the key transit point if the European Union slaps an embargo on its oil imports as part of sanctions to stop Tehran from developing its nuclear programme.
The country has denied allegations it was building atomic weapons.
"It is understood that Western powers have readied a contingency plan to tap a record volume from emergency reserves to replace nearly all the West Asian oil that would be lost if Iran blocks the Strait of Hormuz," Phillip Futures said in a market commentary.
US Defence Secretary Leon Panetta yesterday warned that the United States would take action if Tehran tries to close the vital Strait.
"I think they need to know that if they take that step that they're going to get stopped," Panetta told CBS television.
AFP