"We're down a little bit primarily because of the easing of Mideast tensions ... and the buoyant stock market on Friday," said Mr Michael Pianin, trader at Fuji Securities.

Israeli and Palestinian officials were meeting in Egypt in an attempt to put an end to a wave of violence which has killed at least 100 people and which caused oil prices to resume an upward climb after easing off 10-year peaks hit in September.

In early trades, November NYMEX futures were 66 cents lower at $34.33 a barrel. Meanwhile US stock futures traded modestly higher following a wild rally in technology shares which left the Nasdaq, which suffered heavy selling on Thursday, up nearly 8 per cent at the close on Friday. The tech-weighted Nasdaq has shed 21 per cent of its value since the end of August on earnings worries and is off by nearly the same amount on the year.

The Dow Jones Industrial Average of blue-chip stocks is off 9 per cent since the end of August and a little over 10 per cent on the year.

In early trades, Nasdaq 100 futures were up 8 points to 3,283, while Standard & Poor's 500 futures were up 1.2 points to 1,386.80.

Traders said a speech by Federal Reserve Chairman Alan Greenspan via satellite to the Federal Reserve Bank of Atlanta would be a focus for the markets following stock market volatility and two recent reports showing a pickup in inflation and consumer demand.

On Friday, the government reported prices at the producer level stripped of food and energy components rose a higher-than-expected 0.3 per cent in September, which traders said would have hurt the market a lot more had it not been for uneasiness about the prospects for Mideast peace.

(Reuters)