LONDON, May 22: World oil prices fell on Tuesday as traders cashed in their profits, shrugging off a fresh production cut at Prudhoe Bay -- which is the largest oil field in the United States.
Market participants also set aside concerns over tight US supplies of motor fuel and geopolitical jitters in key crude producer Nigeria.
Brent North Sea crude for July delivery slid 46 cents to $70.03 in electronic deals, after surging on Monday as high as $70.83 in intraday trade, which was the highest level since August 31, 2006.
New York's main oil futures contract, light sweet crude for delivery in June, fell 77 cents to $65.50 a barrel in floor trading on Tuesday. The contract expires at the close.
British oil company BP announced on Tuesday that it has cut output at Prudhoe Bay by 100,000 barrels per day because of a water pipe leak -- the latest setback to hit the world's third-biggest energy company.
A BP spokesman said a “small water leak” was found on Monday in the 400,000-bpd facility, but added that full crude output was expected to resume in a few days.
However, traders took profits on Tuesday after crude futures had jumped by more than a dollar on Monday. Added to the mix, the US Department of Energy was predicted to reveal another increase in American motor fuel reserves on Wednesday.
“There's a bit of froth coming off as the forecast is for a build up in US gasoline (petrol) inventories,” said Investec analyst Tony Eccles.
“However, we're predicting that while stocks will increase, they will still be significantly down on last year.”—AFP
