Oil prices slip further from peaks

Oil prices slip further from peaks
AFP
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First Published: Wed, May 28 2008. 09 30 AM IST
Updated: Wed, May 28 2008. 09 30 AM IST
Singapore: Oil prices slipped further from record peaks Wednesday on profit-taking after fresh data triggered concerns that the US economy will slow down markedly, dampening oil demand, dealers said.
In early Asian trade, New York’s main oil futures contract, light sweet crude for July delivery, shed five cents to $128.80 per barrel.
The benchmark contract had closed at $128.85 on Tuesday, down $3.34 from its closing price on Friday, the last trading day before the US Memorial Day holiday on Monday.
London’s Brent North Sea crude for July slipped 12 cents to $128.19 a barrel, after settling 4.06 dollars lower at $128.31 on Tuesday.
The price falls came after Brent had struck an all-time high of $135.14 and New York crude reached a record $135.09 on Thursday amid concerns about tight supplies and strong demand.
“Traders are picking profits after a very strong rally last week over a number of bearish factors and therefore making a correction,” said Victor Shum, an analyst at Purvin and Gertz energy consultancy in Singapore.
Shum said a report indicating a slump in US consumer confidence, coupled with comments by the International Monetary Fund that oil prices cannot really go up higher without causing a recession, had weighed on the market.
US consumer confidence plunged to a 16-year low in May as the economy struggled for momentum and as surging oil prices pushed inflation expectation to an all-time high, research firm The Conference Board said.
It said its index of consumer confidence, which has been on a downward trend for several months, fell to 57.2 from 62.8 in April. Most analysts expected a reading of 61.
In addition, the closely watched Standard and Poor’s Case-Shiller index of national US home prices fell 14.1% in the first quarter compared with a year ago to the lowest mark since it was first reported in 1988.
The American economy -- the world’s biggest consumer of oil -- stuttered to a 0.6% growth pace in the past two quarters and has been battered by a major housing slump, tight credit and record high crude prices.
Oil prices had initially picked up earlier Tuesday on the back of renewed violence in key African crude exporter Nigeria, but the gains soon faded in the wake of the latest US economic readings.
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First Published: Wed, May 28 2008. 09 30 AM IST
More Topics: Oil | Brent | US economy | Money Matters | Commodities |