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SINGAPORE: Oil prices fell in Asia Friday after an overnight rally sparked by a eurozone rate cut and Greece's prime minister pulling back from a referendum on last week's debt deal, analysts said.
New York's main contract, light sweet crude for delivery in December, fell 22 cents to $93.85 per barrel.
Brent North Sea crude for December delivery shed two cents to $110.81.
"We are seeing some profit-taking after the spikes yesterday in oil futures," Victor Shum, senior principal of Purvin and Gertz energy consultants in Singapore told AFP.
"It shot up quite a bit, the futures reacting to the news that Greece has scrapped its referendum vote and the European Central Bank (ECB) had cut interest rates."
Greek Prime Minister George Papandreou on Monday infuriated world leaders by saying he would hold a referendum on last Thursday's last-minute debt-fighting deal. The announcement sent equities, commodities and the euro tumbling.
However, on Thursday said he was ready to drop a planned vote if he got the backing of the Greek opposition to the debt deal. The opposition have voiced their support for it.
Together with the ECB's unexpected shearing of a key interest rate from 1.50 percent to 1.25 percent to calm the region's fragile economies, the moves boosted world markets.
But Shum warned that crude markets could fall further as current price levels were not consistent with the economic outlook for the United States and Europe.
"For (New York) to be around $94 and Brent above $110 seems too rich given the cool economic prospects in both Europe and the US," he said.
"Although the Greek government may scrap the referendum vote... the eurozone debt danger is by no means over," Shum added, pointing to Italy's persistent yet currently overlooked debt woes as the next danger over the horizon.
- AFP/cc
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