Oil eases as Brent price falls to $41 a barrel

Oil prices eased on Monday as speculative funds continued to take profits but a tight global supply picture stopped the selling from gaining...

Oil prices eased on Monday as speculative funds continued to take profits but a tight global supply picture stopped the selling from gaining much momentum. London Brent crude fell 23 cents to $41.00 a barrel. Trade was subdued, with US markets closed because of the Labor Day holiday. Prices are some $4 under a peak hit last month after big-money speculative funds took profits from a rally that has pushed prices 40 per cent higher this year.

Crude speculators on the New York Mercantile Exchange cut net long positions for the week ended Aug 31, the Commodity Futures Trading Commission said.

Selling was triggered in part by healthy US fuel inventories in the US heading into Labor Day, when summer driving demand winds down.

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Rapid world demand growth and tight spare production capacity limited the price falls. US inventory data last week showing crude stocks at their lowest in five months brought prices up sharply from six-week lows.

‘‘Hedge funds bailing out might continue to depress theprice in the short term, but fundamental tightness will remind the bulls they should not leave the stage for too long,’’ said analysts PFC Energy in a report. Fear of supply disruption from major Middle East producershas also underpinned price strength.

Shipments along Iraq’s northern pipeline were still halted following a fierce attack last week.