Oil prices fell on Monday as traders took profits after crude futures settled near an all-time high in the previous session.
Light, sweet crude for September delivery lost 46 cents to $76,72 a barrel in Asian electronic trading on the New York Mercantile Exchange, mid-afternoon in Singapore.
The contract rose by $2,07 to settle at $77,02 a barrel on Friday, on technical buying and news of faster-than-expected economic growth in the United States. The highest settlement price for a front-month contract to date was $77,03 a barrel, set on July 14 2006. Last July, Nymex crude hit an all-time intraday trading high of $78,40 a barrel.
A US Commerce Department report on Friday showed the US economy grew by 3,4% in the second quarter, removing some of the concerns about economic growth that sent oil prices down on Thursday in sympathy with Wall Street’s plunge.
Some analysts have, however, discounted the economic growth numbers as a factor in Friday’s rally in oil prices, saying it was due largely to buying by large investment funds.
”The strong pricing we have experienced in recent days is primarily due to institutional investors plowing surplus cash into the oil market, not really due to physical issues,” said Victor Shum, an analyst with Purvin & Gertz in Singapore, who added that Monday’s decline was due to profit-taking.
”There remains a lot of upward exposure, but in the immediate near term a reversal is highly possible,” Shum said. ”Global product demand remains strong and tight refinery capacity has been a factor driving crude oil futures.”
Market participants are also monitoring comments by Organisation of the Petroleum Exporting Countries (Opec) officials ahead of the next policy meeting on September 11 in Vienna. Several officials from Opec, which pumps 40% of the world’s crude, have acknowledged that oil prices are high but have been reluctant to consider a production increase, pointing to relatively high stockpiles in the US.
September Brent crude fell 46 cents to $75,80 a barrel on the ICE futures exchange in London.
Nymex heating oil declined by 1,61 cents to $2,057 a gallon (3,8 litres), while gasoline futures lost 1,02 cents to $2,0915 a gallon. Natural-gas prices rose 6,3 cents to $6,271 per 1 000 cubic feet.
Gasoline futures and US retail prices have declined in recent weeks as investors have come around to a view that the refining industry is finally producing enough gas to meet demand after a spring in which the industry was hampered by an unusual number of unexpected outages. — Sapa-AP