Oil prices slide on eurozone debt worries

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Oil prices slid Tuesday on fresh concerns over the eurozone debt crisis, alongside implications from the death of al-Qaeda chief Osama bin Laden.

Brent North Sea crude for delivery in June dropped $1.29 to $123.83 a barrel in late London trade.

New York's main futures contract, light sweet crude for June, fell 90 cents to $112.62 a barrel.

"Both Brent and (New York) crude oil contracts slid lower in correction, following the uncertain economic conditions as renewed concerns raised about eurozone's sovereign debt problems, especially for Greece," said Sucden analyst Myrto Sokou.

Prices had fluctuated wildly on Monday following weekend news of bin Laden's demise.

In a dramatic announcement on Sunday, the White House revealed that US forces had killed the al-Qaeda chief behind the September 11, 2001 attacks, at his secret compound in Pakistan.

In reaction, New York crude had plunged on Monday underneath $110 a barrel, but swiftly reversed course to peak at $114.83 before easing back.

"The energy market was fairly volatile on Monday following news that the US forces claimed killing Osama bin Laden," said analyst Sokou.

"Crude oil prices initially fell almost $4 per barrel but easily rebounded and rallied with Brent oil climbing above $126 per barrel, while WTI crude oil almost tested the $115 per barrel area," she added.

Investors also monitored political unrest in the oil-producing Arab world and its impact on crude supplies.

The Libyan rebels controlling the east of the country said Tuesday they had no plans to resume significant oil exports as their current priority was to ensure oil installations were made secure.

"I'm waiting for an assessment on all of the oil installations (in rebel-held territory)," said Ali Tarhoni, who holds the economy and oil portfolio in the rebel administration.

"The top priority is to protect the installations, not to produce," he told reporters in the rebel capital Benghazi.

Libya, a key crude-exporting nation that was producing some 1.7 million barrels a day (bpd) before an uprising against strongman Moamer Kadhafi broke out in mid-February, has seen its output slashed since the revolt began.

© 2011 AFP

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