Oil prices fell on Tuesday as investors rushed to cash in a day after prices spurted to a post-Iraq war high when OPEC indicated it would shun importers’ calls to scrap a planned cut in output.
The price of reference North Sea crude oil for April delivery lost 40c to $33.40 per barrel in early deals here.
New York’s benchmark light sweet crude April contract fell 21c a barrel to $37.23 in pre-opening electronic trading.
New York’s benchmark contract had Monday shot up $1.25 to $37.44 a barrel, the highest since March 12, 2003 in the tense run-up to the US-led war in Iraq.
Bent North Sea meanwhile surged $1.56 to $33.80.
”We are seeing a correction after yesterday’s high finishes,” one London trader said.
”There is no news today forcing prices down. It is simply a case of profit-taking after yesterday’s highs,” he added.
Monday’s surge in prices came after several Organisation of Petroleum Exporting Countries ministers gathering at an energy conference in Cairo insisted the oil market was well supplied, and that a weak dollar and the recovery of the global economy justified recent hikes.
The 11-nation cartel decided at a meeting in February in Algiers to reduce its production ceiling by one million barrels per day to 23.5 million bpd from April 1 to prevent prices sliding as demand falls for seasonal reasons.
”The impetus for yesterday’s crude oil price strength came mainly from concern that OPEC intends to carry out its planned cuts to April quotas despite current high prices,” said Barclays Capital analyst Kevin Norrish.
Fears of renewed terrorism in the wake of last week’s bombings in Madrid were meanwhile expected to also play a part in keeping prices high.
”Terror fears are likely to keep a premium on the market and prevent much downward movement,” the Sucden brokerage firm said in a research note. ‒ Sapa-AFP