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SINGAPORE: World oil prices fell in volatile Asian
trade on Thursday after rising earlier following a US government
report that showed American crude reserves dipped for the fourth
week in a row.
New York’s main oil futures
contract, light sweet crude for July delivery, was 98 cents lower at
$135.40 a barrel after trading as high as 136.99 in the morning.
The contract jumped $5.07 to
close at $136.38 on the New York Mercantile Exchange on Wednesday.
“It could be a volatile
time,” said David Moore, a commodities strategist at the
Commonwealth Bank of Australia in Sydney, commenting on the reversal
of prices after earlier gains.
“You’ve got to wonder, did it
overshoot a bit? Or is there more to come?”
There may be fluctuations but the
overall near-term trend is higher, he said.
“I think the mood of the market
right at the moment has become more bullish overnight,” Moore
added.
New York’s benchmark contract
surged to an all-time high of $139.12 last Friday, when it rose a
record-breaking $10.75 in one day’s trade.
Meanwhile, Brent North Sea crude
for July delivery fell 95 cents to $134.07 a barrel after rallying
$4 dollars to settle at $135.02 on Wednesday in London. The contract
hit a historic peak of $138.12 last Friday.
The latest price rises came after
the US government said American crude stockpiles dived 4.6 million
barrels in the week ending June 6.
That was far heavier than market
expectations for a drop of 1.5 million barrels and marked the fourth
straight weekly fall.
Moore said prices were supported
by the latest US data but also by news of a planned June 22 meeting
of the world’s biggest oil producers and consumers to discuss
skyrocketing crude prices.
OPEC Secretary-General Abdullah
al-Badri said the meeting, to take place in Jeddah, Saudi Arabia,
will be at head-of-state level.
Badri would not be drawn on who
exactly would attend the one-day gathering. US Energy Secretary
Samuel Bodman is to represent Washington.
Analysts in the Gulf said the
call for the meeting aimed to show that OPEC states were not
responsible for the price surge.
“Most of the arguments about
why oil prices are high have been pretty well ventilated,” Moore
said.
A report issued Tuesday by the
Paris-based International Energy Agency (IEA), an oil market
watchdog for industrialized countries, noted that non-OPEC oil
supply has struggled, indicating tightness in the market, Moore
said.
Members of the Organization of
the Petroleum Exporting Countries (OPEC) collectively produce about
40 percent of the world’s crude. They maintain the oil market is
well supplied and current prices do not reflect the fundamentals of
supply and demand.
The record-high prices have
stoked fears for the global economy and led to sometimes-violent
protests by truckers in Europe, and unrest in India as well.
--AFP
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