Crude oil prices retreated from record levels on global markets on Friday as the diminishing threat from Hurricane Katrina in the Gulf of Mexico took pressure off the market, analysts said.
New York's main contract, light sweet crude for delivery in October, fell US$1.36 to close at US$66.13 per barrel, after briefly trading as high as US$67.95.
Oil hit a record closing price on Thursday of US$67.49, and briefly touched a record of US$68 dollars late Wednesday -- the highest point since futures trading began in 1983.
PHOTO: AP
In London on Friday, the price of Brent North Sea crude oil for delivery in October dropped US$1.40 to close at US$64.87 per barrel, after flirting with its record of US$66.85 dollars on Aug. 14.
"Traders figured out that the odds of the hurricane having a major impact are quite low," said Bill O'Grady, analyst at AG Edwards.
The sharp drop came from "a combination" of the lessened hurricane threat and profit taking, O'Grady added.
Mike Fitzpatrick at Fimat said that when the market failed to breach new highs, momentum players cashed out and took profits, driving prices down.
Sucden analysts said earlier that "concern eased a little after the latest forecasts for Katrina's path indicated that it will miss key US oil rigs in the Gulf of Mexico."
BP and Shell have both evacuated non-essential staff from their deep water eastern Gulf of Mexico rigs ahead of the storm.
Florida was mopping up after a deadly bashing from Katrina and braced for another hit as the weather system swirled over the Gulf of Mexico on a track that would take it back to the storm-weary state.
Katrina raged for hours over the Miami area before heading out early Friday to the Gulf of Mexico, where it regained the steam it lost as it crossed land.
Other supply concerns were still present.
Underlining fragile global supply, an oil pipeline in south Baghdad caught fire Thursday due to a mechanical failure, the US military said.
And Nigeria's labor movement warned it will react quickly to protest the country's latest fuel price hike on Friday -- raising the prospect of a general strike in Africa's biggest oil exporter as filling stations began raising prices.
Crude futures have broken records this month amid mounting supply worries, while market sentiment has remained bullish due to the fierce global appetite for oil, particularly from China and the US.
"It's difficult to look around the global oil markets today and find anything bearish, any factors that might push down prices," said John Kingston, global director of oil at Platts.
"But there are plenty of stops along the supply chain with weaknesses: the start of hurricane season, Iraqi production hanging on by a thread, recent problems in Ecuador, no sign of growth in Russian production and continued speculative interest in being `long' in this market. The increases of the last month reflect that backdrop," Kingston said.
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