Oil price hangs around USD 120 after pipeline shutdown

In afternoon trade, New York's main contract, light sweet crude for September delivery was down 23 cents at USD 119.79 a barrel after rebounding USD 1.44 to close at USD 120.02 a barrel in closing US trade on Thursday.

Brent North Sea crude for September was down 26 cents to USD 117.60 per barrel.

"It's still hanging around the USD 120 level. It has edged down a bit but that's just part of the volatility of the market," said Victor Shum, an analyst with energy consultancy Purvin and Gertz in Singapore.

"Supply side issues will continue to oppose the price slide while the concerns over slackening US demand will weigh down on prices."

Sucden analyst Andrey Kryuchenkov said: "Overall, the market remains at a crossroad. Market participants are torn between persistent fears over slowing energy demand and potentials for further supply disruptions."

One supply side risk comes from the shutdown of the Baku-Tbilisi-Ceyhan (BTC) oil pipeline due to a blast at a pump in eastern Turkey, Shum said.

The pipeline will remain shut for about 15 days, an official from Turkey's state-run oil and gas company BOTAS told Anatolia news agency, but analysts said it could be longer.

Reported by DDNEWS