Oil prices slip after big gains this week

11th June 2010, Comments 0 comments

Oil prices fell Friday on profit-taking after soaring earlier this week on the back of growing optimism over the state of the global economy and world energy demand, traders said.

New York's main futures contract, light sweet crude for delivery in July, retreated 79 cents to 74.69 dollars a barrel. It briefly topped 76 dollars in intra-day trade on Thursday.

Brent North Sea crude for July dipped 25 cents to 75.04 dollars.

"This week started with crude oil prices struggling, then the strong Chinese figures, the weakening US dollar and a rally in the global equity markets helped oil prices to move higher and test the 76-dollar area," said Sucden analyst Mytro Sukou.

"However, it seems that some investors do not feel much confidence for more above 76 dollars ... and were prompted to some profit-taking."

Oil fell in New York on Monday on concerns that weak employment would dampen economic recovery in the United States, the world's biggest energy consumer.

Sentiment was also affected by a stronger dollar which tends to dampen demand for dollar-priced oil because it becomes more expensive for buyers using weaker currencies. In turn, that pushes prices downwards.

Oil then rose on Wednesday as upbeat comments by Federal Reserve chief Ben Bernanke and declining US stockpiles bolstered hopes for economic recovery.

Stock markets rallied and the euro rebounded against the dollar as Bernanke's comments eased fears that the European debt crisis could hurt the fragile US recovery and stall the global upswing.

Fresh support came after US oil inventories fell 1.8 million barrels in the week ending June 4, more than double market expectations and suggesting US demand remained on track.

On Thursday, oil continued higher, boosted by strong Chinese data and an upbeat energy demand outlook from the International Energy Agency.

The IEA raised its estimate of global demand by 60,000 barrels per day to 86.4 million barrels per day this year, saying initial data on economic activity in advanced countries was stronger than expected.

© 2010 AFP

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