Oil hovers below $101 in light holiday trading

Oil hovers below $101 in light holiday trading

Singapore: Oil prices hovered below $101 a barrel Monday in Asia in light trading volume ahead of the US Memorial Day holiday.

Benchmark oil for July delivery was down 6 cents to $100.53 a barrel at midday Singapore time in electronic trading on the New York Mercantile Exchange. The benchmark contract added 36 cents to settle at $100.59 on Friday.

In London, Brent crude for July delivery was down 16 cents to $114.87 a barrel on the ICE Futures exchange.

The Libyan rebels’ finance minister, Ali Tarhouni, said on Sunday that the oil fields located in the eastern half of the country under opposition control will resume production once it’s safe to send workers to the fields. He said he did not expect security to be established soon.

Before the uprising against Moammar Gadhafi’s regime, Libya produced about 1.6 million barrels per day, but output has ground to a halt during the revolt that began 15 February.

Some analysts expect the eventual return of Libyan crude production will help push oil prices lower.

Capital Economics said it sees Brent trading below $90 by the end of 2011 as political upheaval in the Middle East and North Africa, which it estimates has added about $20 to the price of crude, eases.

“It seems likely that the stalemate in Libya will be resolved, one way or another, in the coming months," Capital Economics said in a report.

“In the meantime, there is no sign of significant disruption to supply from other oil producers, notably Saudi Arabia."

Oil has dropped from a 30-month high near $115 a barrel on 2 May. In other Nymex trading in June contracts, heating oil fell 0.5 cent to $2.99 a gallon and gasoline was steady at $3.09 a gallon. Natural gas futures rose 2.5 cents to $4.54 per 1,000 cubic feet.