Oil prices fell on profit-taking in Asian trading hours after the end of the two-week confrontation between the UK and Iran over Iran's seizure of 15 UK naval personnel, dealers said.
However, dealers said that concern about tightness in the reserves of motor fuel in the US had limited the decline. At 11.20 am here (0320 GMT), the New York Mercantile Exchange's main oil futures contract, light sweet crude for delivery in May, had fallen 0.45 usd to 63.83 usd a barrel from 64.28 usd in late trading in the US Thursday. Brent North Sea crude for May had fallen 0.35 usd to 67.89 usd.
Victor Shum, an analyst here with energy consultancy Purvin and Gertz, said: "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."
But he added: "Pricing remains strong, relative to what it was before the seizure."
The UK sailors and marines seized by Iran have now been released.
Shum said that the tightening of gasoline supply in the US and persistent political risks elsewhere were keeping crude prices from dipping too much.
US gasoline reserves plummeted by 5 mln 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 concern about motor fuel supply as the peak season for driving in the US approaches. The US is the world's biggest consumer of energy.
"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."
However, dealers said that concern about tightness in the reserves of motor fuel in the US had limited the decline. At 11.20 am here (0320 GMT), the New York Mercantile Exchange's main oil futures contract, light sweet crude for delivery in May, had fallen 0.45 usd to 63.83 usd a barrel from 64.28 usd in late trading in the US Thursday. Brent North Sea crude for May had fallen 0.35 usd to 67.89 usd.
Victor Shum, an analyst here with energy consultancy Purvin and Gertz, said: "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."
But he added: "Pricing remains strong, relative to what it was before the seizure."
The UK sailors and marines seized by Iran have now been released.
Shum said that the tightening of gasoline supply in the US and persistent political risks elsewhere were keeping crude prices from dipping too much.
US gasoline reserves plummeted by 5 mln 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 concern about motor fuel supply as the peak season for driving in the US approaches. The US is the world's biggest consumer of energy.
"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."
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