Oil prices come off 1-month highs

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World oil prices fell from one-month highs on Tuesday but remained well supported thanks to recent strong Chinese data and fresh confidence in the US economy, analysts said.

Brent North Sea crude for delivery in October dropped 41 cents to 78.62 dollars a barrel in midday London trade.

New York's main contract, light sweet crude for October, slipped 48 cents to 76.71 dollars.

Phillip Capital investment analyst Ong Yi Ling said she expected prices to rebound fast.

"The economic outlook is being viewed now in a more positive light," she told AFP, saying strong Chinese industrial data as well as reassurances that the United States would not slip into a double-dip recession was good for oil prices.

The United States and China are the world's two biggest energy consuming nations.

Official figures released Saturday showed China's industrial output gathering pace, rising 13.9 percent in August after 13.4 percent in July.

Markets were also heartened by comments on Monday from US investment guru Warren Buffett and Goldman Sachs head US economist Jan Hatzius that the US economy would not slump back into recession.

"We will not have a double-dip recession at all. I see our businesses coming back almost across the board," media reports quoted Buffett as saying.

Oil prices begun the week strongly following the closure of a key pipeline carrying crude from Canada to the United States and in the wake of the strong Chinese industrial and other data.

Thursday's shutdown of the Enbridge pipeline which carries crude from Canada to the US mid-West following a leak was supporting prices, analysts said.

The pipeline, which carries 670,000 barrels per day or one third of Canada's oil exports to the United States, remained closed on Monday.


© 2010 AFP

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