| |
| |
![]() |
| |
|
| |
|
| |
|
NEW YORK: Oil prices fell heavily on Monday as a firmer dollar encouraged profit-taking after Friday's all-time highs.
New York's main oil futures contract, light sweet crude for June delivery, slipped 1.73 dollars to close at 124.23 dollars a barrel. The benchmark contract traded lower most of the session, but struck a record intraday high of 126.40 dollars.
In London, Brent crude contract for June delivery dropped 2.49 dollars to settle at 122.91 dollars.
"With the dollar moving up ... it is hardly a surprise to see oil prices backing off," said Mike Fitzpatrick, analyst at MF Global.
"Unfortunately, this is not the structural change that we think will be necessary to begin a wholesale reversal. Even as prices headed towards 126 dollars, speculative interests were still willing to add to length," Fitzpatrick said.
A stronger greenback makes dollar-priced crude more expensive for holders of other currencies.
Both the New York and London contracts blazed new intraday and closing highs on Friday, capping a series of tumbling record prices last week amid geopolitical tensions in the Middle East and ahead of the peak-demand US summer driving season.
"The bullish tone in the oil market persists with geopolitical factors supporting," Bank of Ireland analyst Paul Harris said on Monday.
"Fresh air strikes by Turkey in northern Iraq and continued civil unrest in Lebanon helps to maintain the focus upon supply issues."
However, as threatened disruptions to the Middle East supply have failed to materialise, and as violent threats to output in Nigeria are increasingly priced in, the market is looking overbought, analysts said.
Oil prices have more than doubled in the past year and have rocketed 25 percent since the start of the year, when they broke the 100-dollar barrier.
Analysts cite a variety of factors for the price spikes, including rising energy demand from Asian powerhouse economies China and India, a weak US dollar and OPEC's refusal to pump more crude.
The 13-member Organisation of the Petroleum Exporting Countries (OPEC) produces about 40 percent of the world's oil.
US President George W. Bush will raise the issue of high oil prices and their negative economic impact when he visits OPEC kingpin Saudi Arabia on Friday, White House spokeswoman Dana Perino said.
A group of US senators on Thursday threatened to block arms deals with OPEC member countries if they do not boost oil output to help bring down soaring gasoline prices.
Kuwaiti Oil Minister Mohammad al-Olaim on Wednesday said OPEC might hold an extraordinary meeting over skyrocketing oil prices before a scheduled conference in September, if necessary. - AFP/de
|
