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Oil fell in the Asian trade today after a bearish Standard and Poor’s report on the United States, but geopolitical risks in the Arab world will continue to drive the prices higher, analysts said.
New York’s main contract, light sweet crude for delivery in May, dipped 17 cents to $106.95 a barrel, while Brent North Sea crude for June eased one cent to $121.60.
Mr Victor Shum, a Singapore-based analyst at Purvin and Gertz international energy consultancy, said oil prices were weighed down by ratings agency Standard and Poor’s decision to cut its outlook on US sovereign debt to “negative’’.
The ratings downgrade raised doubts about Washington’s ability to tackle its huge debt and fiscal deficits.
“The supply disruption in Libya is real as are the threats of further uprising in the other parts of oil-producing Middle East and North Africa.”
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