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Oil prices slip as traders cash in

Oil prices slipped yesterday as traders took profits from a rally Thursday on concerns over gasoline stocks ahead of peak demand summer driving season.

US crude futures in New York settled down US$0.25 to US$36.46 a barrel while in London, Brent crude fell US$0.30 to US$33.09 a barrel.

The small decline in prices came a day after New York gasoline futures struck an all-time high above US$1.19 a gallon, triggered by a US Environmental Protection Agency decision to drop requests for an easing of environment fuel rules.

The rules would have softened newly implemented low-sulfur gasoline regulations, making it easier for foreign suppliers to meet US standards and thus increasing domestic stockpiles.

Gasoline futures slipped US$0.174 Friday to US$1.1646 a gallon as traders took profits ahead of the weekend.

The softer market Friday did little to tame the bull in the market, analysts said, with supply fears lingering ahead of the US vacation season and violence in the oil-rich Middle East showing no signs of abating.

Grenade attacks on an oil pipeline in Northern Iraq Thursday failed to upset the line's operations, but jangled market nerves. Bombing attacks this week in Saudi Arabia, the world's largest oil producer, also led to some buying.

Oil producer group OPEC is attempting to meet global oil market needs by producing above its self-imposed quotas, Saudi Oil Minister Ali al-Naimi told reporters at a conference in Texas on Thursday.

The cartel, which officially imposed a fresh 1 million barrel per day (bpd) cut to its output from April 1, is producing 1.7 million bpd above its 23.5 million bpd quota, according to a Petrologistics report Thursday.

OPEC controls roughly half of world oil exports.

The White House said on Friday it eased its economic embargo against OPEC member Libya after the North African country agreed to abandon weapons of mass destruction.

The easing of sanctions will allow US companies to purchase Libyan crude oil and could mean the return of US firms to their dormant oil operations there.

ConocoPhillips, Marathon Oil, Amerada Hess and Occidental Petroleum all have oil lease holdings in Libya that they left behind when expanded US sanctions forced them out in 1986.
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