Oil dips below $69 after overnight climb

Oil dips below $69 after overnight climb
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First Published: Tue, Jun 19 2007. 11 15 AM IST
Updated: Tue, Jun 19 2007. 11 15 AM IST
AP
Singapore: Oil prices fell back on 19 June after closing at a nine-month high above $69 a barrel in the previous session.
Light sweet crude for July delivery lost 12 cents to $68.97 a barrel in Asian electronic trading on the New York Mercantile Exchange, midmorning in Singapore.
The contract on 18 June rose $1.09 to settle at $69.09 a barrel after Nigerian oil unions called a strike for this week amid continuing unrest and violence in the country’s oil producing regions. A Nymex front-month contract last closed above $69 on September one last year.
Analysts said the news from Nigeria prompted large funds to buy energy futures, driving prices higher.
“I think it’s just profit taking this morning,” said Tetsu Emori, chief commodities strategist at Mitsui Bussan Futures in Tokyo. The overnight jump in oil prices was not reflective of the demand-supply picture, he said.
“It’s quite difficult to understand why oil prices rise so high when crude oil supplies are still enough,” Emori said. “Crude oil prices are now overvalued by more than 50% against the fundamentals.”
Attacks by angry villagers and gunmen that cut supply on two Nigerian oil facilities helped drive the price increase yesterday.
Hundreds of angry villagers chased workers away from a Chevron Corp. oil-transfer facility yesterday in restive southern Nigeria and occupied the premises to try to get money they say they is owed by the oil industry.
Emori said the market had already factored in the supply risks posed by the unrest in Nigeria, Africa’s biggest oil producer and one of the top overseas suppliers to the US.
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First Published: Tue, Jun 19 2007. 11 15 AM IST
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