World oil prices plunges to six-month low

LONDON: Oil prices sank below 60 dollars on Monday, striking the lowest levels for more than six months as tensions eased over Iran and BP said it would resume output at the biggest US oil field, dealers said.   

New York's main contract, light sweet crude for delivery in November, shed 87 cents to 59.68 dollars per barrel in electronic deals before the official opening of the US market.   

The contract had earlier plunged to 59.52 dollars -- the lowest value since March 8 -- marking a fall of 24 per cent since its record high of 78.40 dollars, which was hit on July 13 as Israel bombed Lebanon.   

In London on Monday, Brent North Sea crude for November delivery plummeted 93 cents to 59.48 dollars per barrel in electronic trading after touching a low of 59.32 dollars -- also last seen March 8.   

"The market is looking scary... it's falling like crazy and people are bailing out of their positions," said Tony Nunan, manager for energy risk management at Mitsubishi Corporation in Tokyo.   

"The market seems to be bearish with the Iran situation looking like it's reaching a compromise."   

On Sunday, Iranian President Mahmoud Ahmadinejad had signalled his government's readiness to put "everything" on the negotiating table, if those in the US government who talk about regime change in Iran abandon their plans.   

"If they change their behaviour, it is possible to talk about everything," the Iranian leader told The Washington Post. "It's the attitude and the approach of some American politicians that ruin things."    

The comments came as world powers are considering imposing sanctions that would target Iran's nuclear and ballistic missile sectors if Tehran persists in refusing to suspend uranium enrichment.   

The United States is calling for economic sanctions against Iran, unless Tehran halts its uranium enrichment activities. Analysts warn that Iran, the world's fourth-biggest crude producer, could retaliate to economic sanctions by slashing exports, and risking another surge in crude oil prices.   

The market was also calmed on Monday after BP had said late last week that it would resume further output at Prudhoe Bay, the largest oil field in the United States.   

The closure of Prudhoe Bay early last month, due to a pipeline leak, sent Brent crude prices to a record high 78.64 dollars. The field accounts for eight per cent of total US crude oil production.   

"BP said it would restore most of its shut-in output at the Prudhoe Bay oilfield in Alaska this week, ahead of a previous target of late October," Sucden analyst Michael Davies said.   

The British energy behemoth had said late Friday that US pipeline regulators had given the green light to the resumption of 150,000 barrels per day (bpd) of output this week. That would bring total production to 400,000 bpd, compared with current production of around 250,000 bpd.   

The oil market remained subdued Monday also owing to signs of a slowing US economy, rising energy inventories and a milder-than-expected US Atlantic hurricane season.