Brent crude oil prices hovered above $68 a barrel on Monday following sharp gains at the end of last week, with investors still on edge over a foiled plot to attack oil facilities in top exporter Saudi Arabia. London's Brent crude, currently seen as more representative of global oil prices than US oil, rose 1 cent to $68.42 a barrel.
US Frontmonth June crude fell 3 cents to $66.43 a barrel. Brent rallied over 1 percent on Friday, lifting the week's gains to nearly $2, after Saudi Arabia said it fended off an al Qaeda-linked plot to attack oil facilities, military bases and public figures, arresting Islamist militants, including some trainee pilots preparing for suicide operations.
"Saudi Arabia's announcement has served as a sharp reminder to the market of the potential risks to oil supplies," said David Moore, an analyst at Commonwealth Bank of Australia. "Those risks are not likely to go away soon." Saudi Arabia said on Saturday that the arrest of 172 suspected militants did not end the al Qaeda-linked threat in the country and the authorities would continue to be on a lookout for militants.
Underscoring the region's geopolitical insecurities, Iran on Sunday dismissed any suggestion it might agree to partially suspend its uranium enrichment activities as a way towards ending a protracted international stand-off.
Analysts said the latest statement has dented hopes of an imminent resolution that were raised last week when Iran's chief nuclear negotiator Ali Larijani said that Tehran and the European Union were nearing "a united view". Tensions between Iran, the world's fourth-largest oil supplier, and the West over Tehran's nuclear programme have supported prices for more than a year.
A sharp draw-down in US gasoline stocks has also kept prices aloft, with dealers fearing a squeeze on motor fuel supplies as the driving season looms a month away. "Given the current low level of gasoline inventories, GS Research believes that the motor gasoline price and crack risks remain skewed to the upside," Goldman Sachs said in a report.
Low production from US refineries dues to maintenance and unplanned repairs have cut the nation's gasoline stockpiles nearly 15 percent since February. Gary Williams Energy Corp said it hoped to begin restarting its 50,000 barrel per day refinery in Winnowed, Oklahoma, on Sunday after it was shut following a fire in two storage tanks that was extinguished on Saturday night.
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