By Fayen Wong
PERTH, March 31 (Reuters) - Oil fell more than $1 to less
than $105 a barrel on Monday, extending Friday's decline, after
the restart of a crude pipeline system in Iraq eased fears of
an extended exports disruption from the country's oil-rich
south.
U.S. light crude for May delivery <CLc1> fell $1.04 cents
to $104.58 a barrel by 0053 GMT.
The decline brings total losses since Friday to nearly $3,
erasing the gains made on Thursday after the attack on the
pipeline feeding the Basra export terminal interrupted flows
from southern Iraq for the first time since 2004.
London Brent crude <LCOc1> fell 55 cents to $103.22.
"The restart of the crude pipeline in Iraq was the key
factor in pushing oil prices down," said Gerard Burg, a
resource analyst at the National Bank of Australia in
Melbourne.
"The volatility in the dollar also encouraged some sell-off
in the energy markets."
Iraqi Shi'ite cleric Moqtada al-Sadr called on his
followers on Sunday to stop battling government forces after
six days of fighting in Iraq's south and in the capital Baghdad
threatened to spiral out of control [].
The lull in fighting in the oil-rich province of Basra
allowed oil field workers to return to work, ensuring output of
around 2 million barrels per day continued without disruption,
a company official said on Sunday [].
While the flow of Iraqi oil exports from Basra has
normalised, analysts said unease about security in the Middle
East as well as threats of further supply disruptions in Gabon
would provide underlying support for prices in the short-term.
Turkey's armed forces killed 15 members of the outlawed
Kurdistan Workers Party (PKK) in northern Iraq on Thursday
using long-range land weapons, followed up by air strikes, they
said on Saturday.
It was the first time Turkish forces had killed a group of
Kurdish rebels inside northern Iraq since the end of a
large-scale ground incursion into the neighbouring country last
month, prompting concerns about regional instability.
In Gabon, oil industry unions threatened to call a
nationwide strike if they fail to reach a deal to end a strike
at Shell's <RDSa.L> subsidiary in the country, where 60,000
barrels of oil per day have already been shut down since March
20 [].
Analysts said a further weakening of the dollar could also
help crude futures to resume their trek to record levels.
The dollar stayed vulnerable against the yen in choppy
trade on Monday after signs of slowing consumption in the
United States and worries about more losses at financial firms
pushed Wall Street lower [] [].
Crude oil speculators on the New York Mercantile Exchange
cut their net long positions last week, according to data from
the Commodity Futures Trading Commission released Friday
[].
Net crude long positions fell to 53,892 in the week to
March 25, from 86,352 in the previous week.
OPEC governor of the United Arab Emirates said on Sunday
that oil markets were well-supplied with inventories of crude
oil and refined products [].
The rise in oil prices, which struck a record high of
$111.80 in mid-March, was a result of weakness in the U.S.
dollar as well as rising cash flows from hedge funds, Ali
al-Yabhouni told an energy conference in Dubai.
(Reporting by Fayen Wong; Editing by Neil Fullick)
