SINGAPORE, Aug 17 (AFP): Crude prices fell in Asian trading Thursday on continued signs that a ceasefire between Israeli troops and Hezbollah guerrillas appeared to be holding, dealers said.
Dariusz Kowalczyk, senior investment strategist with CFC Seymour in Hong Kong, said prices were expected to drop further mainly because of a ceasefire that took effect Monday between Israel and the Hezbollah Shiite militia, which fought a month- long war in southern Lebanon.
New York's main contract, light sweet crude for September delivery, was at 71.14 dollars a barrel compared with 71.89 dollars per barrel in late United States trades Wednesday after the contract dropped 1.19 dollars.
Brent North Sea crude for delivery in October eased 33 cents to 72.50 dollars per barrel.
"Crude prices retreated further as a truce between Israel and Hezbollah held for a second day," said Mike Fitzpatrick, an analyst at Fimat USA.
Traders were concerned about the Middle East conflict and its effects on oil prices.
Kowalczyk said another factor in the expected oil price decline is an economic slowdown in the US and China. He said demand for crude may also slow as a result.
The Organization of Petroleum Exporting Countries (OPEC) said in a report Wednesday that world oil demand was now expected to grow by 1.3 million barrels per day (bpd) to average 84.5 million bpd, a downward revision of 80,000 bpd from last month's estimate.
Dealers said further sharp falls in crude prices could be limited by concerns over Iran. The Islamic republic has until August 31 to halt its uranium enrichment and reprocessing activities or face sanctions.
Iran is the world's fourth-largest crude oil producer and traders fear Iranian energy supplies will be affected if Tehran refuses to back down from international pressure to halt its nuclear programme.