by Perrine Faye
LONDON, Sept 6 (AFP) - Oil prices fell here on Monday despite new sabotage attacks on Iraqi pipelines and worries about tropical storm Frances, with the New York market closed for the Labor Day holiday.
The price of benchmark Brent North Sea crude oil for delivery in October lost 43 cents to 40.80 dollars per barrel in late deals.
"It is very quiet because of the American holidays," said Prudential Bache trader Christopher Bellew, adding that prices were weaker in part because of selling by hedge funds wishing to lock in profits from high oil prices.
New York's reference contract, light sweet crude for October delivery, dipped seven cents to 43.99 dollars per barrel on Friday, before the market closed for a three-day break.
In Iraq, saboteurs set ablaze a vital oil pipeline between the Iraqi city of Kirkuk and Turkey Monday, just a day after the fire that halted all northern crude exports had been extinguished, an oil official told AFP.
"We had extinguished the fire Sunday at noon but unknown attackers reignited it Monday at 9:30 am (0530 GMT) by setting fire to the oil that had leaked on both sides of the pipeline," Ahmed Ali, from the Northern Oil Co., said.
"It will take us another 24 hours to put it out again," he added.
A pipeline supplying gas to a major electrical plant south of Kirkuk was also attacked Monday, a local police official told AFP.
"Problems in Iraq do cause small movement in the market but they don't have a major effect on the market anymore because they have been an ongoing thing for a good 18 months now," GNI-Man Financial trader Lee Elliott said.
Meanwhile, Hurricane Frances, which was downgraded to a tropical storm Sunday, moved off Florida's west coast Monday but experts said it could build up strength again over the warm waters of the Gulf of Mexico.
"Hurricane Frances did move into the Gulf of Mexico early this morning, so we are keeping an eye to see if anything happens to the refineries out there," Elliot said.
And yet another hurricane loomed in the distance.
Hurricane Ivan, a dangerous Category 4 storm packing maximum sustained winds of nearly 215 kilometers (135 miles) per hour, was a 1,010 kilometers (625 miles) east-southeast of Barbados early Monday.
Prices have tumbled from a record of 49.40 dollars per barrel seen in New York last month, but remain volatile amid worries about attacks on Iraqi oil installations and supplies from Russia.
"Crude prices have fallen back from peaks reached in mid-August, as fears of potential supply disruptions have become less acute and Iraqi supplies have been restored," Standard Chartered economist Helen Henton wrote in a research note.
"However, events in the last week, including sabotage to a pipeline in northern Iraq and further rumours surrounding Russian oil company Yukos, highlight the continued fragility of the market," she added.
Russia's tax authorities handed Yukos a 4.2-billion-dollar (3.44-billion-euro) tax bill for 2001, higher than the 3.4-billion-dollar sum that company officials expected, the tax ministry said in a statement Friday.