Oil slips as Rice calls for Mideast ceasefire

LONDON (Reuters) – Oil slipped below $74 a barrel on Monday due to diplomatic efforts to resolve the conflict in the Middle East, a region that pumps almost a third of the world’s oil.

U.S. Secretary of State Condoleezza Rice said there was an urgent need for a “sustainable” ceasefire in Lebanon. Syria said it was willing to engage in dialogue with the United States to help end the crisis.

“Conciliatory noises from both Israel and Syria are heartening for the Middle East,” said Tobin Gorey, commodities strategist at the Commonwealth Bank of Australia. “But signals remain fairly muddled and nothing has been resolved as yet.”

 

U.S. crude for September shed 74 cents to stand at $73.69 a barrel by 1213 GMT. London September Brent crude traded down 63 cents to $73.12.

Oil hit a record $78.40 in New York earlier in July on fears the fighting between Israel and Hizbollah guerrillas could spread. Prices are still up about 21 percent this year.

Hizbollah guerrillas were battling Israeli forces in Lebanon on Monday. Hizbollah said it had shot down an Israeli helicopter and hit five tanks, inflicting casualties in battles that erupted after Israeli forces pushed north from a border village.

The chances of the conflict widening are now thought less likely by some oil market analysts, making it less of a prop for prices.

“The markets are now viewing the Israeli/Hizbollah conflict as localized, and are not assigning it the same sense of urgency,” Man Financial said in a report.

LONDON (Reuters) – Oil slipped below $74 a barrel on Monday due to diplomatic efforts to resolve the conflict in the Middle East, a region that pumps almost a third of the world’s oil.

U.S. Secretary of State Condoleezza Rice said there was an urgent need for a “sustainable” ceasefire in Lebanon. Syria said it was willing to engage in dialogue with the United States to help end the crisis.

“Conciliatory noises from both Israel and Syria are heartening for the Middle East,” said Tobin Gorey, commodities strategist at the Commonwealth Bank of Australia. “But signals remain fairly muddled and nothing has been resolved as yet.”

 

U.S. crude for September shed 74 cents to stand at $73.69 a barrel by 1213 GMT. London September Brent crude traded down 63 cents to $73.12.

Oil hit a record $78.40 in New York earlier in July on fears the fighting between Israel and Hizbollah guerrillas could spread. Prices are still up about 21 percent this year.

Hizbollah guerrillas were battling Israeli forces in Lebanon on Monday. Hizbollah said it had shot down an Israeli helicopter and hit five tanks, inflicting casualties in battles that erupted after Israeli forces pushed north from a border village.

The chances of the conflict widening are now thought less likely by some oil market analysts, making it less of a prop for prices.

“The markets are now viewing the Israeli/Hizbollah conflict as localized, and are not assigning it the same sense of urgency,” Man Financial said in a report.