No oil panic as Asia takes stock

TOKYO, Japan -- Oil prices continued to fall Thursday after assurances by OPEC producers that supplies would remain secure following Tuesday's terror attacks on the United States.

On the TOCOM Asian Petroleum Index in Tokyo prices for light sweet oil fell 57c to $26.68c a barrel Thursday, while standard oil prices fell 77c to $25.91 a barrel.

In London trading Brent blend crude futures eased 23c to $28.83 a barrel after a 6 percent jump on Tuesday amid fears of supply disruptions in the wake of the suicide flights, Reuters reports.

Despite some emergency measures among import-dependent Asian countries, dealers in Asia, Europe and the U.S. said there was no sign of panic buying.

Exports from leading producer nations and transatlantic shipments were running as normal, oil company and producer country officials said.

"There is no shortage in supplies and there won't be," said UAE Oil Minister Obaid bin Saif al-Nasseri.

Traders said they saw little chance of any impact on deliveries from the Middle East, despite lingering worries that the attacks could be linked to recent violence in Israel.

U.S. officials said the attacks may have been conducted by people with links to Saudi exile Osama bin Laden, who has refuge in Afghanistan, or his organization.

Knee-jerk reaction

"If it proves to be bin Laden then there should be no worries about Middle East oil," said consultant Gary Ross of New York's PIRA Energy.

The New York Mercantile Exchange remains closed leaving London's International Petroleum Exchange as the only option for futures traders.

"The move in prices was clearly a knee-jerk reaction to the news, but not an illogical one," said brokers GNI of Tuesday's gains.

"It was logical to assume, however small the probability, there is a chance that security of oil supplies may be affected by the attack."

But the OPEC cartel said it was committed to ensuring stable supplies and prices.

OPEC Secretary-General Ali Rodriguez rejected suggestions that any member of the Arab-dominated group, which includes Saudi Arabia, Iraq, Iran, the UAE and Libya, would use oil as a political weapon if violence escalated in the Middle East.

"None of these things change OPEC's decision to guarantee the stability of the oil market. OPEC member countries are committed to their promises to guarantee sufficient oil supplies," Rodriguez told Reuters.

He said there was no immediate need to raise cartel export limits.

Asian nations shore up supplies

Some Asian nations, however, took measures to shore up supplies.

In Thailand, the board of the National Energy Policy Office said local refiners would be obliged to store 5 percent of the country's daily demand, raising stocks from 3 percent.

An additional five percent of daily national demand would be kept as crude, bringing the total Thai oil reserve to the equivalent of 10 percent of consumption.

"The board wants to be sure that oil supply is secure, that is why we have increased the compulsory reserve level," Chaturon Chaisang, minister in charge of Thailand's energy policy, told reporters.

Taiwan's two refiners -- state-run Chinese Petroleum Corp and privately-held Formosa Petrochemical Corp -- both said they would stop all product exports with immediate effect.

But the region's biggest consumers, Japan -- almost totally reliant on imports -- and China, held off from any emergency measures. South Korea said it might ask local refiners to stop exports of oil products if domestic demand rose dramtically in the next few days.

Reuters contributed to this report.