Oil fell on Monday on profit-taking following gains last week on concerns of a possible shortfall in US gasoline supplies, but tensions in Iran and Nigeria continue to support prices. US crude fell 22 cents to $64.72 on Monday, partially reversing last on Thursday's gains.
Which saw prices jumping 3.7 percent on concerns over US gasoline supplies ahead of the peak summer driving season. London Brent crude was down 9 cents at $69.33. Analysts said markets were eyeing tensions in major oil producers Iran and Nigeria, as well as watching developments in the economy of China, the world's second-largest oil consumer.
A senior Iranian official announced on Saturday that the country has started building its first domestically made atomic power plant a move which could deepen a prolonged stand-off over Iran's nuclear programme, which the West fears is aimed at making weapons.
Tehran says it only wants to produce electricity. "In the next decade Iran will be one of the most talked-about countries in the world regarding domestic nuclear energy," Mohammad Said of Iran's Atomic Energy Organisation was quoted as saying by the ISNA news agency. Fresh abductions in Nigeria over the weekend have also further dampened the market's hopes of more Nigerian oil coming onstream.
Gunmen in the oil heartland of Port Harcourt kidnapped two Indian employees of a petrochemical firm, police said on Sunday. The militants had initially taken 10 workers from the residence but soldiers rescued some of them. Violence has surged in Africa's top oil producer since February 2006, cutting a third of Nigeria's output and forcing thousands of expatriates to evacuate the volatile region.
Apart from supply concerns, the market was keeping a close watch on China's economy after the central bank raised interest rates raising worries about demand growth.
Oil prices are expected to rise this autumn and winter because non-Opec countries have failed to raise production to meet demand, a senior Iranian official was quoting as saying on Sunday.
Mohammad Ali Chattily, deputy director for international affairs of the National Iranian Oil Company, told the Metro news agency that oil production by countries outside Opec had declined somewhat this year, not risen as had been predicted.
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