World oil prices slip in subdued trade
Oil drifted lower on Wednesday as some traders cashed in recent gains, but the market remained on alert over developments in the eurozone debt crisis and US supply disruptions.
New York's main contract, light sweet crude for delivery in July, dipped seven cents to $102.63 per barrel.
Brent North Sea crude for July dropped 40 cents to $116.33 a barrel in early afternoon deals.
"It seems that the oil market is on standby, as investors remain cautious eyeing the currency movements and any further news about a potential second bailout to Greece," said Sucden analyst Myrto Sokou in London.
"In the meantime, we can expect some further consolidation in the oil prices, with potential upside momentum, especially after the recent high levels that we experienced yesterday."
Crude oil had spiked higher on Tuesday, winning support from the weak dollar, amid speculation over another Greek bailout.
Prices also rose on the back of new supply problems in the United States and intensifying unrest in Yemen.
"Crude rallied in early trading on Tuesday, underpinned by fresh supply disruptions in the United States and a weaker dollar," said VTB commodities analyst Andrey Kryuchenkov.
"Supportive comments over a new aid tranche for Greece to help the country meet its debt obligations from policymakers in the eurozone helped to push the single currency higher and restore some confidence on the broader market.
"More importantly, though, TransCanada announced a shutdown of its crucial 591,000 barrel-per-day (bpd) Keystone pipeline which carries Canadian oil from Alberta to the US Midwest hub at Cushing where crude inventories are more than plentiful at the moment."
Kryuchenkov added: "It is a temporary disruption caused by a pipeline leak, but it is supportive given ongoing supply side jitters globally."
Crude prices are expected to stay high, supported largely by steady demand in emerging economies and possible moves by oil cartel OPEC to curb production, analysts said.
"Long-term basic oil fundamentals still remain constructive, stemming from demand by emerging economies such as China and Brazil," said Ong Yi Ling, a Singapore-based commodity analyst for Phillip Futures.
"OPEC may not increase output, or will not increase it much, which may lead to a gradual tightening of the oil markets and higher prices in the later part of the year," she added.
Investors are looking ahead to the June 8 ministerial meeting of the Organisation of Petroleum Exporting Countries (OPEC) in Vienna.
© 2011 AFP