Oil prices drop under 75 dollars

12th July 2010, Comments 0 comments

World oil prices sank under 75 dollars per barrel on Monday, as many traders cashed in gains and awaited the start of the US corporate earnings season, analysts said.

New York's main contract, light sweet crude for delivery in August, fell by one dollar to 75.09 dollars a barrel.

London Brent North Sea crude for August slid 92 cents to 74.50 dollars per barrel in late afternoon deals.

"Crude oil prices gave back some of the recent gains and retreated ... as investors remained cautious and were prompted to some profit-taking ahead of the US corporate earnings season," said Sucden analyst Myrto Sokou.

"On a day with a lack of economic indicators, investors will be watching for the US dollar movement and the momentum in the global equity markets."

Quarterly earnings results are expected in the coming days from Alcoa, Google, General Electric, Citigroup, Bank of America, Intel and JPMorgan.

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

However, traders opted to cash in gains as the market was "getting ahead of itself," agreed 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."

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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