Oil eases, but market awaits U.S. vengeance

Oil eases, but market awaits U.S. vengeance

LONDON (AFP): The price of oil drifted lower on Monday, giving back some of the gains racked up on Friday in a market still nervous of U.S. retaliation for last week's terrorist attacks on New York and Washington.

A barrel of Brent North Sea crude for November delivery fell 19 cents to US$29.24 amid gentle profit-taking.

Oil prices surged by a dollar a barrel on Friday as investors made sure they were not short of crude over the weekend in case the United States did launch military action as part of its declared "war" on terrorism.

No reprisals materialized over the weekend, so some investors took profits on Monday.

But analysts still fear that a U.S. military onslaught on terrorism could set it against the Arab oil-producing world, potentially jeopardizing crude supplies. Previous conflicts and crises in the Middle East have habitually led to a sharp rise in crude prices.

Although prime suspect Osama bin Laden is believed to be in Afghanistan, which does not produce oil, "the concern is that while the Middle Eastern governments currently appear to support the U.S., sentiment could turn sour if many innocent muslims lose their lives," said Lawrence Eagles, an oil expert with the GNI brokerage.