Thursday, August 16, 2012

Oil falls on profit-taking in Asian trade

SINGAPORE - World oil prices tumbled in Asian trade Friday as traders cashed in gains from a recent rally, analysts said.

New York's main contract, West Texas Intermediate (WTI) light sweet crude for delivery in September, was down 37 cents to $95.23 a barrel and Brent North Sea crude for October delivery sank 67 cents to $114.60.

Prices rallied in New York following encouraging jobs and housing figures in top crude consumer the United States, with WTI hitting fresh three-month highs.

The black gold was finding support, however, on news of a cyber attack against Saudi Arabian oil giant Aramco as well as rising geopolitical tensions in the Middle East.

"Saudi Aramco has said that its computer systems have been hit by a virus," British bank Barclays said in a market commentary.

The Saudi oil giant has said the attack has not affected production.

However, Barclays added that in a market that is starting to focus more on geopolitical issues in the Middle East, the idea that there may be parties intending to sabotage oil operations is likely to be unsettling.

It said "any attack against facilities that did cause any significant physical disruption of Saudi flows would open up the extreme upside for oil, in the context of the current deterioration of the geopolitical context for the Middle East as a whole".

The cyber attack on Saudi Arabia comes as fighting continues in Syria between rebel forces and the government of Bashar al-Assad, while Iran remains in a standoff with Western powers over its controversial nuclear programme.

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