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Oil prices slip slightly
AFP
NEW YORK
Petroleumworld.com 07 31 07
World oil prices dipped Monday as traders cashed in profits after New York crude had surged close to a record close before the weekend, traders said.
New York's main futures contract, light sweet crude for delivery in September, fell 19 cents to close at 76.83 dollars per barrel.
In London, the price of Brent North Sea crude for September delivery lost 52 cents to settle at 75.74 dollars per barrel.
The market's firm tone came after a US government report Friday that the world's largest economy expanded a stronger than expected 3.4 percent in the second quarter, slightly ahead of the Wall Street forecast of 3.2 percent.
The performance substantially topped the economy's tepid 0.6 percent growth in the first quarter, and suggested continued strong energy demand.
"Better than expected economic news last Friday seems to have calmed the market's fears for energy demand to weaken even though a bit of a pall has been cast by the stock market selloff," said Mike Fitzpatrick, an analyst at Man Financial.
"Even though some of Friday's froth has been blown off the market overnight, the outlook for tightening crude oil supplies over the second half of the year still leaves underlying sentiment bullish," he said.
Sucden analyst Michael Davies said the US economic growth data had eased concerns about the mushrooming subprime crisis in the housing market.
"The numbers calmed recent fears about the troubled (US) subprime mortgage crisis spreading to other markets and worries that oil demand growth could suffer as a result," Davies said.
High-risk borrowers in the US subprime market have defaulted in large numbers on their mortgages, raising fears that financial institutions might tighten credit across the board, undermining conditions for growth.
On Friday oil prices jumped, with New York crude closing at 77.02 dollars as the US gross domestic product data renewed concerns about supply in the face of anticipated demand from the United States.
Despite Monday's modest losses, world oil prices are nonetheless trading more or less within two dollars of intra-day peaks hit during the northern hemisphere summer last year.
"The near-record-high prices have led to calls for OPEC to hike output, but at the moment OPEC remains unmoved by these pleas," Davies added.
Iran, the second-largest producer in the Organization of the Petroleum Exporting Countries after Saudi Arabia, on Sunday voiced opposition to any hike in output by the cartel.
Oil Minister Kazem Vaziri Hamaneh said current high prices were due to political concerns and a gasoline shortage in the United States amid the country's peak demand season for motor fuel.
"The recent fluctuation in the oil markets emanates from political and geopolitical reasons," Hamaneh said."In the current circumstances, an increase in oil production will not have any effect on oil prices. Therefore there is no reason for an OPEC production increase," he said, describing global production and storage of crude as "high."
OPEC is due to hold its next regular meeting on September 11 at its headquarters in Vienna.
AFP 30 1941 GMT 07 07
Copyright© 2007 AFP. All rights reserved.
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