LONDON, March 10: World oil prices fell on profit taking Thursday, a day after reaching a new high point in London and nearing record levels in New York on fears that soaring demand might outstrip supply, dealers said.

New York’s main contract, light sweet crude for delivery in April, dropped 40 cents to $54.35 a barrel in early deals. On Wednesday it came within three cents of beating last October’s record high of $55.67.

In London, the price of Brent North Sea crude oil for delivery in April shed 30 cents to $53.08 a barrel Thursday. It had shot up $1.21 to a new record of $54.05 a day earlier.

Dealers said prices fell slightly as traders took profits after Wednesday’s surge, which came despite news of an increase in crude stocks from the US Department of Energy (DoE), analysts said.

The US inventories data was “not bearish enough to change the market mood”, noted Societe Generale analyst Deborah White.

“The cold still hitting the Atlantic Basin, and widespread betting that global oil demand will continue to surprise us by its strength, are far more important.”

Demand fears played a key role in supporting current price levels.

“The market is in a very, very bullish mood at the moment,” Investec analyst Bruce Evers said.

“Demand is very, very close to outstripping supply. This is the underlying factor. I think in the second quarter demand will be ahead of supply, it is a very real risk.

“China, India are not the only two big consumers at the moment, Brazil, North America and Northern Europe are also consuming a lot of oil,” he added.

In a report published on Tuesday, the DoE predicted global demand growth of around 2.5 per cent throughout 2005-2006, supporting prices “near the high-to-mid-$40” mark in New York.—AFP