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Thursday, 2 May, 2002, 22:21 GMT 23:21 UK
Oil price eases on Arafat release
Oilrig
Oil supply fears saw prices rise strongly between January and April
Oil prices in the US have fallen for the third day in a row, as the release of Palestinian leader Yasser Arafat eased fears that Middle East tension might disrupt crude supplies.

Benchmark crude ended $0.51 lower at $26.24 a barrel, and stood more than $1 lower earlier on Thursday.

In London North Sea Brent crude slid $0.44 to $24.43 barrel, after hitting a day low of $24.79.

The decline followed the re-emergence of Mr Arafat after more than a month penned in his headquarters by Israeli troops.

The oil price fell over "the presumption of somewhat reduced tensions", said analyst Adam Sieminski of Deutsche Bank Securities.

Luca Bertali of brokers Prudential-Bache said: "The war premium keeps getting sliced off as the situation gets more positive."

Iraq factor

Easing tensions were also seen as raising the chances of Iraq lifting its oil export embargo, ordered in protest at the US's alleged pro-Israeli bias.

Iraq, the world's eighth largest oil exporter, said it would lift the embargo if Israel withdrew unconditionally from Palestinian towns.

Israel on Thursday maintained its siege at the Church of the Nativity in Bethlehem.

Iraq is due to reconsider the embargo on Tuesday.

Oil prices soared by more than 30% between January and April, hitting a six-month high of $28.35 on 4 April, as Middle East tensions rose.

See also:

02 May 02 | Middle East
Arafat urged to act for peace
01 May 02 | Business
US petrol price row ignites
02 May 02 | Business
Shell profits almost halved
31 Dec 01 | Business
Tide turns against the oil firms
28 Dec 01 | Business
Opec cuts exports to boost prices
27 Dec 01 | Business
Oil prices soar on output hopes
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