SINGAPORE — Oil prices slid in Asian trade Wednesday as traders took profit from recent gains, with weak US energy demand dampening the market’s mood despite concerns over tension in Iran and Nigeria, analysts said.
New York’s main contract, West Texas Intermediate (WTI) crude for delivery in February, was down 54 cents to $101.70 in morning trade.
Brent North Sea crude for February delivery shed 39 cents to $112.89.
“Oil prices have dropped… as we see profit-taking possibly brought about by advanced figures showing US crude stockpiles (going) up,” said Ker Chung Yang, commodities analyst at Phillip Futures in Singapore.
The American Petroleum Institute said Tuesday US crude stockpiles gained 397,000 barrels last week, indicating softer demand in the world’s biggest oil-consuming nation.
Analysts are also keeping a close watch on the situation in Nigeria where ethnic violence and a two-day old general strike have paralysed the country and sent its government into crisis mode.
The unrest in the country — Africa’s top oil producer — started Monday amid protests against the government’s January 1 scrapping of fuel subsidies, which caused petrol prices to more than double, sparking widespread anger.
Violence between the country’s Muslims and Christians has exacerbated the situation, while worries over Iran’s nuclear programme continue to put pressure on oil prices, analysts said.
Western powers, including Britain and France, are pushing for stronger economic sanctions to be imposed on Tehran to force it to abandon a nuclear programme they allege is destined to produce atomic bombs.
European foreign ministers are set to agree on tougher sanctions when they meet on January 23.
Iran — the world’s fourth-largest oil producer — has threatened to close the strategic Strait of Hormuz if the West goes ahead with plans to ban imports of its oil, a move that could spark an armed confrontation.