Oil
prices fell in Asian afternoon trade Wednesday, with investor sentiment weighed
by fears over Greece's deepening debt crisis and a downgrade of global energy
demand.
New York's main contract, light sweet crude for delivery in
October, was down $1.48 to $88.73 a barrel in afternoon trade, and Brent North
Sea crude for October settlement eased 59 cents to $111.30.
"With the Greek risk overhanging the market, prices have
been very edgy, very jumpy," said Nick Trevethan, senior commodities
strategist at ANZ Research in Singapore.
On Tuesday, Germany, France and Greece agreed to hold a fresh
round of talks on the crisis after US President Barack Obama urged greater
efforts to calm volatile markets.
German Chancellor Angela Merkel, French President Nicolas
Sarkozy and Greek Prime Minister George Papandreou will hold a teleconference
Wednesday.
Merkel had earlier sought to soothe traders' fears over
Greece, stressing that everything would be done to avoid an "uncontrolled
insolvency" and emphasising the eurozone would remain intact.
Efforts to increase crude production by Libya following the
ouster of Moamer Kadhafi remain under threat after forces loyal to the fallen
dictator attacked oil infrastructure on Monday, analysts said.
The International Energy Agency on Tuesday revised its
expectations of Libyan crude production capacity from zero to between 350,000
and 400,000 barrels per day by the end of 2011, rising to 1.1 million by the
fourth quarter of 2012.
"However, if the attack by pro-Kadhafi forces on oil
infrastructure on Monday marked a shift in tactics, it will put the Libyan
production at risk," Trevethan said.
Kadhafi, wanted for alleged crimes against humanity by the
International Criminal Court, remains in hiding but many of his inner circle
and one of his sons have fled to neighbouring Niger.
Expected lower energy demand due to the poor economic climate
is also dampening sentiment.
The Organisation of Petroleum Exporting Countries said demand
for this year is expected to be 87.99 million barrels per day (bpd), down from
a previous estimate of 88.14 million bpd.
For 2012, demand is expected to average 89.26 million bpd,
down from the August estimate of 89.44 million bpd, OPEC said.
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Source : AFP
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