Oil prices fall but supply worries limit losses in Asia

SINGAPORE: World oil prices fell in Asian trade on Monday but worries over tight energy supplies limited the drop, dealers said.

New York's main oil futures contract, light sweet crude for delivery in November, was 33 cents lower at $80.89 per barrel in morning trade.

Brent North Sea crude for November delivery was at $78.64 per barrel, down 26 cents.

"Generally there is a lack of bullish news driving the market, so there is some softening of oil pricing," said Victor Shum, of energy consultants Purvin and Gertz in Singapore.

"However, the crude oil supply and demand fundamentals remain quite firm in the near term," Shum added. He said he expects strong support at the high $70 level.

He noted that, heading toward the Northern hemisphere winter season, heating oil inventories remain below the five-year average for this time of year.

The US Department of Energy's (DoE) weekly report released Wednesday showed stockpiles of distillates, including heating fuel, unexpectedly dropped by 1.2 million barrels to 135.9 million barrels during the week ended September 28.

Industry analysts had forecast a rise of 1.3 million barrels. Crude oil stocks rose by 1.2 million barrels, the DoE report showed. Most analysts had expected oil reserves to fall.

New York oil prices burst through the $80 level last month and went on to hit an all-time peak of $84.10 , while Brent oil hit a record high of $81.05 per barrel in late September.

Global oil prices have more than doubled from around $30 in 2003, and analysts say the forces pushing up prices show no signs of easing, with 100-dollar-a-barrel oil possible in 2008.