Wednesday, January 25 2006 11:39 Hrs (IST) - World Time -

Singapore: Oil prices eased further in Asian trade today (Jan 25,2006) on reduced fears of near-term risks to global supply ahead of the latest US energy inventory numbers,dealers said.

At 11:55 am (0925 IST), New York's main contract,light sweet crude for March delivery, was down 31 cents to 66.75 dollars a barrel from its close of 67.06 dollars in the United States yesterday (Jan 24,2006).

"The geo-political risk premium and how it fluctuates is a key driver in the price of oil,' said Victor Shum, an analyst with Purvin and Gertz in Singapore. "Since the time Saudi Arabia objected to Iran's call to cut output and promised to provide more oil, the risk premium has declined," it said.

Shum also said that US and European difficulties in finding a majority in the International Atomic Energy Agency (IAEA) so far to refer Iran to the UN security council were significantly reducing the risk of an oil embargo.

"The risk premium of supply disruption has been reduced by these two events," said Shum.

Iran has resumed uranium enrichment work in the face of Western protests but denies it is trying to develop nuclear weapons.

Crude prices soared over the past few weeks, hitting a four-month high of 69.20 dollars a barrel Monday, mainly as dealers feared an oil embargo on Tehran would dramatically reduce crude supply.