Oil prices ease on Israeli pullback

By JAMES MCLEAN
Updated:

 

WORLD oil prices eased today as Israeli forces began withdrawing from Palestinian territory and the world's largest supplier, Saudi Arabia, tried to calm concerns that conflict in the Middle East will lead to a world energy crisis.

Brent crude for May delivery eased 38 cents to trade at $26.64 a barrel as London traders weighed up the possibility that the Israeli withdrawal may persuade Iraqi leader Saddam Hussein lift the export embargo he announced yesterday.

After sparking concerns that pump prices would soar following a surge in crude above $27 yesterday, prices fell 40 cents in Asia overnight and in early London trade they eased further as the market reacted to tentative signs of an Israeli fallback.

City bookmaker Financial Spreads was calling the day's closing price for May Brent down by another 30 cents.

The market was further eased by signs that Venezuela's President Hugo Chavez was taking tough action to maintain his country's exports as troops entered strike-hit facilities to ensure the pumps stayed on.

Saudi Oil Minister Ali al-Naimi also calmed markets by stressing his country's commitment to maintaining adequate flows of oil for the rest of the world.

Saudi newspapers reported al-Naimi as saying: ' I believe there is no threat to the reliability of worldwide oil supplies, and the reliability of Saudi Arabian supplies in particular.'

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