Oil prices edge lower on easing Middle East concerns

Oil prices fell further in Asian trade today on easing concerns about supplies from the Middle East, but upbeat economic data from Europe and China capped losses, analysts said.

New York's main contract, West Texas Intermediate for delivery in November was down 19 cents at $103.40 in mid-morning trade, while Brent North Sea crude for November eased 13 cents to $108.03.

WTI dipped $1.16 in New York yesterday, while Brent fell $1.06 in London trade.

"Oil prices edged lower... Due to higher output of crude from Iraq and a potential improvement in US-Iran relations, easing supply concerns," Teoh Say Hwa, head of investment at Phillip Futures in Singapore, said in a note.

Officials from Iraq, the second largest producer in oil cartel OPEC, yesterday were quoted as saying that the country has restored normal output after completing repair work on a pipeline leak.

The European Union yesterday announced that Iran's foreign minister would meet major powers this week on Tehran's nuclear programme in what could be a historic top-level contact with the United States.

Sanctions imposed on Iran by Western powers for its alleged efforts to build a nuclear bomb have caused its oil exports to fall by more than half, to below one million barrels per day.

Tehran insists its nuclear programme is for peaceful purposes.

Teoh said the dip in oil prices were capped by positive manufacturing data from the eurozone and China.

HSBC yesterday said its preliminary purchasing managers' index of Chinese manufacturing in September hit a six-month high of 51.2, while a PMI of business activity in the 17-nation eurozone hit a 27-month high of 52.1.

A reading above 50 indicates growth, while anything below signals contraction.