Oil prices slide to six-month low

The level of speculation in the oil market has declined

Oil prices have fallen to a six-month low of less than $61 a barrel as healthy US fuel stockpiles and reduced tension over Iran have calmed markets.

The price of a barrel of US light, sweet crude fell $1.20 to $60.46, its lowest level since 21 March, while Brent crude dipped to $60.47 in London.

Prices have fallen $17 since July, when the Israel-Hezbollah conflict sent shockwaves through oil markets.

Prices are now lower than they were at the beginning of the year.

Iran issue

Prices have been steadily falling over the past few weeks as the ceasefire between Israel and Hezbollah has held and the end of the US holiday season has reduced demand for gasoline.

Analysts attributed the latest falls to signs that the international community's dispute with Iran over its nuclear ambitions is unlikely to result in sanctions against one of the world's leading oil producers.

Prices now are rewarding to both producers and consumers Ali al-Naimi, Saudi oil minister

Figures published earlier this week showed that supplies of US distillate fuels, including heating oil, remain at their highest level since 1999.

Saudi Arabia's oil minister, Ali al-Naimi, said on Tuesday that prices were beginning to return to normal levels.

"Prices now are rewarding to both producers and consumers and their impact on the global economy is small," he said.

Changing sentiment

Many economists were concerned that stubbornly high oil prices, allied to a slowdown in the US economy, could stunt global growth next year.

But one energy analyst said he now expected prices to fall further.

"Sentiment has completely changed," said Mark Waggoner, president of Excel Futures.

"We are still going lower here as there are no signs that we are bottoming out."