Oil prices flat in Asian trade

SINGAPORE (AFP) - Oil prices were flat in Asian trade Friday as investors kept an eye on global financial and equity markets shaken by a crisis in US lending to risky home loan borrowers, dealers said.

Prices have firmed in recent days after falling sharply from an all-time peak 78.77 dollars on August 1 as the financial markets calmed down, easing concerns about weaker economic growth that would dampen energy demand.

But concerns returned Thursday as fears of a credit squeeze resurfaced, indicating that the fallout from the US subprime mortgage woes were far from over, analysts said.

At 11:20 am (0320 GMT), New York's main contract, light sweet crude for October delivery was unchanged at 69.83 dollars a barrel.
Brent North Sea crude for October delivery eased a cent to 69.85 dollars.

"Oil markets are weighing pontential influences at present, including what, if any, impact the financial market issues of recent weeks may have on US economic growth," Australia's Commonwealth Bank said in a note.

The United States is the world's biggest oil consumer, and an economic slowdown there will hit demand for oil.

The oil market is also watching any decision by the OPEC cartel during their meeting next month regarding production levels and whether "there is a risk of oil market conditions worsening over the northern winter," Commonwealth Bank said.

Winter will fuel higher demand for heating fuel.

Many analysts believe the Organisation of Petroleum Exporting Countries will keep production at current levels when it meets on September 11 at its Vienna headquarters.

At its last meeting in March, the cartel decided to hold its official production quota at 25.8 million barrels of oil per day.

The weather remains a key factor for oil prices as September is the peak hurricane season in the United States, analysts have said.

US oil production facilities in the Gulf of Mexico can be threatened by such vast storm systems.