LONDON, June 28: World oil prices slumped more than one dollar on Tuesday amidst profit-taking, but fresh record highs above $60 likely would be reached unless strong demand for energy cooled, analysts said.

New York’s main contract, light sweet crude for delivery in August, plunged $1.29 to $59.25 per barrel in early deals.

It had hit an intra-day high points of $60.95 on Monday — the highest level since it was first traded in 1983 — as a hardline conservative election win in major oil producer Iran over the weekend rattled the market.

In London on Tuesday, the price of Brent North Sea crude oil for delivery in August plummeted $1.10 to $58.18 per barrel after striking a new record level of $59.59 the previous day.

Despite prices falling, there remained the potential for crude futures to head higher again soon unless the market saw definite signs of a slowdown in demand, analysts at the Sucden brokerage firm said.

“Fundamentally there does not seem to be much that could pull the market lower until the high prices eventually erode demand,” they said.

Adjusted for inflation, oil prices are below levels reached in the wake of the 1979 Iranian revolution when prices surged to upwards of $80 a barrel in today’s money.

US Treasury Secretary John Snow, meanwhile, played down the impact of record-breaking oil prices on the US economy.

“Despite the headwinds these prices are creating, we are pushing through it right now,” Snow told the US television network CNBC on Tuesday.

He added that if someone had betted two years ago that the US economy would be growing at about 3.5 per cent a quarter in the face of $60 oil, “you would have taken the other side of the bet”.—AFP