Sun, Nov 12, 2006 - Page 10 News List

Oil prices drop as traders cash in on Thursday's gains


Oil prices fell on Friday as traders took profits after prices jumped above US$61 a barrel the previous day.

The oil market was also digesting a monthly report on Friday from the International Energy Agency (IEA), which trimmed its outlook for this year's global oil demand growth to 1.1 percent from 1.2 percent. Demand growth for next year held at 1.7 percent.

The IEA also forecast a 2.6 percent jump in fourth-quarter global energy demand, citing high consumption in the US. The agency noted US consumption was being compared with figures when the impact of Hurricane Katrina and mild weather curbed demand a year ago.

The IEA said that demand for oil from OPEC was expected to rise 1.6 million barrels a day, due to lower output from non-OPEC countries.

The outlook points to tighter market conditions and higher prices just as OPEC oil production cuts announced late last month are going into effect.

Light sweet crude for December delivery on the New York Mercantile Exchange slipped US$1.57 to settle at US$59.59 a barrel, after jumping US$1.33 a day earlier. Brent crude on the ICE Futures exchange dropped US$1.61 to settle at US$59.71.

Heating oil futures dropped US$0.049 to settle at US$1.6966 a gallon (US$0.44819 per liter) on the NYMEX, unleaded gasoline futures fell US$0.0383 to settle at US$1.5627 a gallon, and natural gas futures lost US$0.161 to settle at US$7.794 per 1,000 cubic feet (US$0.2752 per cubic meter).

Oil prices have tumbled from a July high above US$78 a barrel, trading in a range of US$57 to US$61 a barrel over the past five weeks.

The crude price rose earlier in the week following US government data that showed declining inventories of gasoline and heating oil.

Prices were also supported by some OPEC ministers saying another production cut may be in order.

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