LONDON, April 8: World oil prices fell on Friday for the fourth successive day, slipping below $54 a barrel on easing supply concerns, after soaring to record highs earlier in the week. New York’s main contract, light sweet crude for delivery in May, dropped 61 cents to $53.50 a barrel in early deals. In London, the price of Brent North Sea crude oil for delivery in May, lost 70 cents to $53.34 a barrel.
London’s International Petroleum Exchange moved to full-scale electronic dealing on Friday, ending a quarter of a century of pit, or open-cry, trading.
Oil prices have fallen heavily after hitting record peaks on Monday of $58.28 a barrel in New York and $57.65 in London.
But they have since plummeted by more than $3.
Prices continued to fall on Friday “following a bout of fund selling”, analysts at the Sucden brokerage firm said.
“Speculators who are behind mammoth gains in the oil and commodities markets in 2005 unwound their long positions, leading some analysts to wonder if the oil rally had peaked.”
Meanwhile, Wednesday’s data from the US Department of Energy (DoE) was also a factor.
“The big thing that changed is the perception of gasoline in the market,” Societe Generale analyst Deborah White said.
Analysts had previously cast doubt on the DoE data, which said US refineries operated at 93.7 per cent of capacity in the week to April 1, up from 91.1 per cent the previous week.
The higher capacity level, a result of refineries increasing production after undergoing maintenance, pushed gasoline production to more than 8.6 million barrels per day (mbpd), the DoE added.
“When we saw the DoE numbers come out, investors did not believe it,” White said.
But “the prices in the market today say that the market does believe it”.
That eased supply worries ahead of the start of the US summer driving season in late May.
Further downward pressure came from US government data revealing that natural-gas reserves in the world’s biggest economy grew last week for the first time in five months.—AFP
