Oil prices slide after strong rebound

LONDON  - World oil prices slid Thursday on profit-taking after a rebound of more than four dollars the previous day that was driven by an unexpected decline in US petrol stockpiles, analysts said. New York's main contract, light sweet crude for September delivery, handed back 1.89 dollars to 124.88 dollars a barrel. The contract had rallied by 4.58 dollars on Wednesday. On Thursday, Brent North Sea crude for September delivery down by 2.37 dollars to 124.73 dollars a barrel following a rally of 4.39 dollars the previous day. "Momentum is still to the downside, although yesterday (Wednesday) was the first time in more than two weeks the market closed above the previous day's range," said Nimit Khamar, an oil analyst at the Sucden brokerage in London on Thursday. Libya's Oil Minister Shukri Ghanem forecast on Thursday that the price of crude oil was set for a rebound. Libya is a member of the Organization of Petroleum Exporting Countries, the powerful crude exporters' club that accounts for 40 percent of world oil supplies. "There is a big fall because prices are currently high," he said by telephone to AFP. "When prices are 130 or 140 dollars per barrel, they fall back more sharply." He said that "we are following developments (on prices) closely...but we think they will rebound," in a reference to the rally in prices on Wednesday. The US Department of Energy (DoE) said Wednesday that American gasoline (petrol) inventories sank by 3.5 million barrels in the week ending July 25. That surprised traders because market expectations had been for a weekly gain of 400,000 barrels. The weekly DoE report was the main catalyst for Wednesday's sharp rise in prices, said David Moore, a Commonwealth Bank of Australia analyst in Sydney. The DoE added Wednesday that crude reserves fell by 100,000 barrels. That was the second weekly decline in a row and compared with analysts' consensus forecasts for a heavier drop of 1.25 million barrels. "In our opinion the report was fairly mixed overall," added Khamar from Sucden. "Market participants decided to plough money back into the market after gasoline stocks fell by 3.5 million barrels." Oil prices have dropped by more than 20 dollars since touching record highs above 147 dollars a barrel on July 11. Traders said the downward move reflected slackening energy demand in the United States. "It is clear that consumption is slowing" in response to weak economic conditions, said Antoine Halff, an analyst at Newedge Group, cited by Dow Jones Newswires.

ePaper - Nawaiwaqt