Oil prices fall after brief surge

2nd September 2010, Comments 0 comments

World oil prices dropped Thursday on profit-taking after soaring a day earlier in the wake of booming US manufacturing data, traders said.

Brent North Sea crude for delivery in October fell 65 cents to 75.70 dollars a barrel in midday London trade.

New York's main contract, light sweet crude for October, slipped 17 cents to 73.74 dollars a barrel.

Crude futures had surged by about two dollars on Wednesday in the wake of strong manufacturing data from the United States and China -- the world's two biggest consumers of oil.

In a volatile week's trade, oil prices had fallen sharply on Monday and Tuesday as traders fretted over the pace of the US economic recovery and growing fuel inventories.

"Oil prices rose sharply on Wednesday, although the markets failed to recoup all of Tuesday's surprisingly large loss," said Edward Meir, an analyst at broker MF Global.

"Strong manufacturing figures from both China and the US triggered the advance," he said Thursday.

The oil market had on Wednesday shrugged off data from the US Department of Energy that showed American crude inventories jumped 3.4 million barrels last week -- far higher than the 800,000 barrel rise predicted by analysts.

Traders also set aside a report from payrolls firm ADP saying that US private sector employment dropped in August for the first time in seven months as well as government data showing a bigger-than-expected drop in construction spending.


© 2010 AFP

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