Monday, July 31 2006 11:00 Hrs (IST) - World Time -

Singapore: "Oil prices were weaker in Asian trade today (July 31, 2006), extending losses as a temporary halt to Israeli air attacks on Lebanon helped take some of the risk premium out of the market," dealers said.

They said the 48-hour suspension of Israeli air strikes in southern Lebanon, after heavy loss of life in the town of Qana, helped encourage hopes that a cease-fire could be arranged.

At the same time, news of a slowdown in second quarter US growth figures, which saw prices fall sharply in New York Friday, pointed to possibly weaker demand going forward, taking some pressure off prices.

For the moment, however, US gasoline (petrol) demand remains strong due to the summer holiday driving season and this will likely continue to provide some support.

At 0220 GMT (0740 IST), New York's main contract, light sweet crude for September delivery, was down 24 cents to 73.00 dollars a barrel from 73 dollars in late US trades Friday when it had fallen 1.30 dollars.

Brent North Sea crude for September fell 17 cents to 73.22 dollars.

Dealers said the suspension of Israeli air strikes in southern Lebanon helped ease some concerns over crude supplies from the oil-rich Middle East.

"It has gone up so much on the Lebanon issue," said Tony Nunan, manager for energy risk management with Mitsubishi's international petroleum business in Tokyo.