Oil falls below $113 after bin Laden killed

May 02, 2011 |

SINGAPORE

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Oil prices eased off two-and-a-half-year highs to below $113 a barrel on Monday after President Barack Obama announced that al-Qaida leader Osama bid Laden had been killed.

Benchmark crude for June delivery was down $1.23 at $112.70 a barrel at midday Singapore time in electronic trading on the New York Mercantile Exchange.

The contract rose $1.07 to settle at $113.93 on Friday and reached $114.18 during in the session, the highest since September 2008.

In London, Brent crude for June delivery was down 98 cents to $124.91 a barrel on the ICE Futures exchange.

Obama said bin Laden was killed Sunday by American special forces in Pakistan. Traders said the death of bin Laden could weaken al-Qaida's ability to carry out attacks and destabilize the oil-rich Middle East.

However, al-Qaida operatives could also seek revenge for their leader's death, and political uprisings this year throughout the Middle East and North Africa that have threatened to disrupt crude supplies were not related to al-Qaida.

Trading volume was light in Asia as markets in China, Hong Kong, Taiwan, Malaysia and Singapore will closed for international Labor Day. Markets in Japan were open Monday but will be closed the next three days for Golden Week holiday.

In other Nymex trading in May contracts, heating oil fell 2.5 cents to $3.25 a gallon and gasoline dropped 1.8 cents to $3.38 a gallon. Natural gas June futures were down 1.5 cents at $4.69 per 1,000 cubic feet.

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