Oil prices fall as concerns about Iran retreat (AP)

NEW YORK ? Oil prices started the week lower after analysts said that nations should have ample supplies regardless of Iran's threats to block exports from the Persian Gulf.

Benchmark crude on Monday fell by 84 cents to $100.72 per barrel in New York. Brent crude, which is used to price foreign oil varieties that are imported by U.S. refineries, fell 80 cents $112.26 per barrel in London.

Prices climbed last week on fears that Iran could try to close the strategic Strait of Hormuz in response to international sanctions. One-sixth of the world's seaborne oil passes through the narrow strait, and traders feared that a conflict in the region would slow down crude shipments out of the Persian Gulf.

Morgan Stanley analysts pointed out over the weekend that producers can always bypass the strait by transporting oil through pipelines in Saudi Arabia and the United Arab Emirates. Libya also has been ramping up oil fields that were idled during last year's rebellion, and its exports will help replenish stockpiles.

Also, Morgan Stanley analyst Hussein Allidina said, Europe's soft economy will further depress the world's energy appetite this year.

"If tension in the Mideast recedes, the premium that has been built into crude prices is likely to fade, sending crude prices lower," Allidina said in a research note.

Europe's flagging economy remains a major source of concern for oil traders. Less government spending is expected to constrict economic growth and possibly send the eurozone into recession this year. German Chancellor Angela Merkel and French President Nicolas Sarkozy met Monday to work on ways to boost the continent's flagging economy.

The lack of any bold new moves is keeping investors cautious, said Gene McGillian, a broker and oil analyst at Tradition Energy.

In the U.S., gasoline prices were flat at a national average of $3.37 per gallon, according to AAA, Wright Express and Oil Price Information Service. A gallon of regular has risen by 9 cents in the past month and is almost 29 cents higher than a year ago.

In other energy trading, heating oil fell by less than a penny to $3.07 per gallon and gasoline futures were flat at $2.76 per gallon. Natural gas fell by 5 cents to $3.01 per 1,000 cubic feet.

Source: http://us.rd.yahoo.com/dailynews/rss/energy/*http%3A//news.yahoo.com/s/ap/20120109/ap_on_bi_ge/oil_prices

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