LONDON (AFP) - Oil prices resumed their retreat after a rebound late last week, with markets continuing to take a more relaxed view of supplies, despite the closure of the Suez Canal.
New York's main contract, light sweet crude for delivery in December, fell 54 cents to 49.07 dollars per barrel in electronic trading.
In London the price of Brent North Sea crude oil for December delivery dropped 47 cents to 45.95 dollars a barrel.
Both markets enjoyed a bounce-back on Friday, halting a 10-day slide that has seen prices slump by 11.5-percent.
"There was a very strong close on Friday, which caused some unmatched settlement in prices," hence prices started the week lower, said Prudential Bache broker Christopher Bellew.
Prices nudged higher briefly on news that Egyptian authorities had closed the Suez Canal because of a disabled 89,000-tonne oil tanker that left more than 60 ships blocked.
The Liberian-registered vessel, "Tropic Brilliance", was immobilised cross-wise in the canal on Sunday near the town of Ismailiya, 140 kilometres (90 miles) northeast of Cairo.
Port sources said the tanker would have to be partly discharged before it can be moved. The authority said it might take at least two days for a tug with the necessary equipment to reach the area.
Some 46 ships heading towards the Red Sea are lying off the coast and in the Port Said area to the north of the canal, while another 20 are blocked in the south, heading from the Red Sea to the Mediterranean, authority officials said.
News of the blockage "turned the market slightly around", said Kevin Blemkin, a trader at the GNI-Man Financial brokerage firm.
"It could disrupt the loadings. We just wait to hear more news."
World oil prices have backtracked from record summits scaled last month as fears of a possible supply crunch during the northern hemisphere winter eased following recent rises in US crude oil stockpiles.
"Rising crude and natural gas stockpiles in the US and signs that high energy costs were hurting economic growth have been gradually eroding a rally that has lifted prices over 50 percent this year," analysts at the Sucden brokerage firm wrote in a note to clients.
"OPEC's supply surge has helped rebuild US crude stocks, which have risen 10 million barrels in the last two weeks."
Traders were also keeping a wary eye on a US military offensive in the Iraqi city of Fallujah where US and Iraqi troops seized a hospital and two bridges and US warplanes pounded the rebel city amid mounting expectations of an all-out assault.
The action came one day after Iraq's interim Prime Minister Iyad Allawi declared a 60-day state of emergency across most of the country in a bid to control an escalating insurgency ahead of elections promised by January.
Allawi said Monday that he would impose a curfew and other measures under emergency laws on the rebel cities of Fallujah and Ramadi starting at 6:00 pm (1500 GMT).
11/08/2004 - 12:54 GMT - AFP