Brent crude oil slips below $66 before long US weekend

23/05/2015 09:20 AST

Oil prices fell on Friday as worries over the impact of war in the Middle East on crude supplies were outweighed by reports of profit-taking ahead of a long weekend.

Monday, May 25 is Memorial Day in the United States and a public holiday in much of Europe, leaving many markets closed.

"No one wants to hold open positions ahead of a long weekend so books are being squared, bringing some consolidation," said Carsten Fritsch, senior oil and commodities analyst at Commerzbank in Frankfurt.

July Brent crude was down 80 cents at $65.74 a barrel by 1240 GMT after closing up 2.3 per cent on Thursday.

US crude futures are experiencing their longest winning streak since records began in 1983, helped by a drop in US crude and product stockpiles last week, reflecting better demand in the world's largest oil consumer.

US crude for July was down 60 cents at $60.12 a barrel, but poised to post gains for the 10th week in a row.

Data from the US Energy Information Administration this week showed a big decline in US oil product stockpiles, suggesting end-user demand has been strong.

"With US travel expected to reach a 10-year high over Memorial Day, according to AAA (American Automobile Association), product inventory is expected to decline even further over coming weeks," ANZ analysts said in a report.

Violence in the Middle East has increased worries over the security of oil supply from the region.

A suicide bomber blew himself up at a Shi'ite mosque in eastern Saudi Arabia during Friday prayers, residents said, and up to 30 people were reported to have been killed or wounded.

Islamic State fighters have tightened their grip on the historic Syrian city of Palmyra and have overrun Iraqi government defences east of Ramadi, the provincial capital that they seized five days earlier.

Government forces have been routed across large parts of central Iraq, the second largest oil exporter in the Organization of the Petroleum Exporting Countries.

"The headlines from the Middle East have been worrying, although the fighting probably won't affect oil supply," said Commerzbank's Fritsch.

Reuters