LONDON, Sept 20: World oil prices slumped on Tuesday as traders banked profits won from a hurricane threat to US oil rigs, while the market dismissed Opec’s offer to supply more crude from October if required.
New York’s main contract, light sweet crude for delivery in October, which expires later Tuesday, sank $2.39 to $65 per barrel during early trading. In London, the price of Brent North Sea crude for November delivery dived $2.07 to $63.54 per barrel.
“The fall in prices has more to do with yesterday’s (Monday) huge moves and it’s down to profit-taking,” said Investec analyst Bruce Evers.
Tropical storm Rita was upgraded to a hurricane Tuesday as it barreled toward a vulnerable chain of islands in southernmost Florida on a track that would take it over the oil-rich Gulf of Mexico, and possibly close to New Orleans, recently devastated by Hurricane Katrina.
New York crude had jumped by $4.39 and London Brent shot up by $3.80 on oil supply concerns Monday, after the National Hurricane Centre warned that Rita would gather speed.
As Rita was upgraded to hurricane status, traders meanwhile dismissed the latest output move by Opec.
“What they have done was widely expected by the maket,” Evers said.
Another London-based analyst, who wished to remain anonymous, said the cartel’s decision was “of no consequence”.
Elsewhere, major crude producer and OPEC member Iran warned that it could link its oil business and other economic trade with individual countries, based on whose side they took in a dispute over its nuclear programme.—AFP
