LONDON, Nov 5: World oil prices fell further from recent record peaks on Monday as traders took profits.
Analysts said easing supply concerns owing to expectations of reduced demand because of the US sub-prime crisis and the calming of tensions between Turkey and Iraq had been the trigger for the selling.
New York’s main futures contract, light sweet crude for delivery in December, sank $1.01 to $94.92 a barrel. It hit a record high of $96.24 last Thursday.
Elsewhere Monday, Brent North Sea crude for December delivery dived $1.68 to $90.40 in London, after hitting an historic peak of $92.21 last Friday.
Crude futures remain underpinned by stretched global energy stockpiles, lingering geopolitical tensions and the weak US currency, which makes dollar-priced commodities cheaper for buyers using stronger currencies.
“Crude prices were lower on profit taking (on Monday) amid continuing sub-prime-related negative headlines,” said Sucden analyst Michael Davies.
Financial markets were spooked on Monday by the resignation of Citigroup boss Charles Prince, alongside news that the biggest US bank expected losses of up to $11 billion (7.6 billion euros) related to problems in the troubled US sub-prime mortgage sector.
“The news was yet another headline ... to persuade the market that we could see slower (oil) demand growth from the US in the days ahead,” Davies added.
“Most commentators though are generally saying that while they envisage lower demand growth in the US, demand growth from China, India and Asia, excluding Japan will keep markets tight.” On the geopolitical front, tensions calmed slightly between Turkey and key crude producer Iraq.
President George W. Bush on Monday faced crisis talks with Turkish Prime Minister Recep Tayyip Erdogan as he ties to dissuade his “war on terror” ally from an incursion into Iraq to hunt down Kurdish rebels.
Ahead of the meeting at the White House, Erdogan warned that Turkey’s patience over cross-border attacks by the outlawed Kurdistan Workers’ Party (PKK) was running out.
But the Bush administration, while promising US support against the PKK, is keeping up the pressure for Turkish restraint for fear of destabilising one of the few calm zones of Iraq.—AFP
