Oil dips slightly as Asia observes Lunar New Year

The price of oil dipped slightly toward $95 a barrel on Monday as investors cut back on speculative positions and most Asian markets were closed for a holiday.

By early afternoon in Europe, the benchmark oil contract for March delivery was down 30 cents to $95.42 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell 11 cents on Friday.

Trading was expected to be light for much of the week with several Asian markets shut for the Lunar New Year.

Analysts noted that for the first time in eight weeks there was a net reduction in investors’ positions betting that the Nymex contract will continue to advance.

“This ... constitutes the first sign of skepticism among market players about further increases in the price of” the Nymex contract, said analysts in a report from Commerzbank in Frankfurt.

Prices were kept from falling further by comments Sunday from Iranian President Mahmoud Ahmadinejad, who said the Islamic Republic would not yield to pressure from Western powers, including sanctions blocking much of the country’s oil exports, to halt its nuclear activities, including uranium enrichment.

Meanwhile, economic data has mostly been supportive. On Friday, new figures showed the U.S. trade deficit fell nearly 21 percent in December from November - the smallest trade deficit in nearly three years - due largely to plunging oil imports. Production of oil is surging in the U.S., weighing on the price of U.S. crude oil.

In London, Brent crude, used to price international varieties of oil, was down 82 cents to $118.08 a barrel on the ICE Futures exchange.

In other energy futures trading on the Nymex:

— Wholesale gasoline fell 3.74 cents to $3.0214 a gallon.

— Natural gas declined 2.4 cents to $3.248 per 1,000 cubic feet.

— Heating oil retreated 1.06 cents to $3.2278 a gallon.