Oil prices drop towards 75 dollars

12th July 2010, Comments 0 comments

World oil prices sank towards 75 dollars per barrel on Monday, reversing earlier Asian gains as traders cashed in on an over-bought market, analysts said.

New York's main contract, light sweet crude for delivery in August, sank 63 cents to 75.46 dollars a barrel.

Brent North Sea crude for August slid 55 cents to 74.87 dollars.

Traders were taking profits from oil as the market was "getting ahead of itself," said Victor Shum, an analyst with energy consultancy Purvin and Gertz.

"It's primarily people selling to lock in profits.... Oil is getting a little too strong and over-bought and so there's selling among traders."

Oil had crept above 76 dollars in early Asian deals as buoyant stock markets and expectations of healthy corporate earnings in the US pushed up prices.

Shum said that prices would probably hover around 75 dollars in the near term.

"The question is whether there is enough confidence in the market for oil prices to hold above 75 dollars," he told AFP.

"I think that given the uneven economic recovery around the world, pricing in the mid-70 dollars is probably a more stable value."


© 2010 AFP

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