Oil prices fall under 82 dollars before US data

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World oil prices dropped under 82 dollars on Wednesday as traders awaited the latest weekly snapshot of crude inventories in the United States -- the world's biggest energy consuming nation.

New York's main contract, light sweet crude for delivery in September, shed 66 cents to 81.89 dollars a barrel.

Brent North Sea crude for September delivery lost 82 cents to 81.82 dollars in midday London trade.

Investors were probably sitting tight following recent gains won ahead of Wednesday's data from the US Department of Energy, said Serene Lim, an oil and gas analyst with ANZ bank.

"It could be dropping on profit-taking... I think investors might be taking a breather," she said.

Oil prices overlooked a series of weak economic data in the US Tuesday, which weighed on equities markets and the greenback.

US consumption expenditure last month fell by almost 0.1 percent compared with a similar percentage rise in May. Consumer spending is a key driver of US economic growth, usually accounting for two-thirds of output.

US factory orders also slumped in June, for a second consecutive month, the Commerce Department said.

And a report by the National Association of Realtors showed the number of contracts signed to purchase existing US homes unexpectedly fell to its lowest level in nine years.

Nevertheless, Lim said oil prices would trade above 82 dollars in the short term due to the "strong momentum" of recent rallies, as well as the onset of the hurricane season, which tends to disrupt production at oil installations in the Gulf of Mexico.

© 2010 AFP

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