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Oil skids after downturn in global equities markets

World oil prices tumbled on Friday as traders took profits following a downturn in global equities markets this week that prompted concerns about economic growth and energy demands.

New York's main oil futures contract, light sweet crude for delivery in July, sank US$2.17 to close at US$64.76 per barrel.

In London, Brent North Sea crude for July delivery skidded US$2.62 lower to settle at US$68.60 per barrel.

The US stock market suffered a sharp three-day selloff this week, losing nearly 3 percent of its value, as investors shifted way from expectations of a rate cut by the US Federal Reserve to a possible rate hike. Stocks also stumbled in Asia and Europe.

"With all the talk of rising interest rates finally killing the stock market, participants are justifiably concerned about energy demand growth," Mike Fitzpatrick of Man Financial said.

Analysts also attributed the fall in prices to profit taking after New York's bellwether crude hit US$67.42 per barrel on Thursday, its highest level since March 27.

Another factor helping ease prices was the diminishing threat from Cyclone Gonu in the Middle East. On Thursday prices jumped as traders fretted over tight US gasoline supplies and tracked Cyclone Gonu's progress in the Middle East.

"Crude futures were lower [on Friday], coming off after strong recent gains after Cyclone Gonu lost its power and Oman announced it resumed operations at its 650,000 barrels-per-day oil terminal," Sucden analyst Michael Davies said.

Gonu, which tore through Oman this week before weakening towards Iran, killed scores of people and left others missing in the Gulf sultanate, police said on Friday.

Although the storm had raised fears about oil shipments in the Strait of Hormuz, through which about one quarter of the world's crude supplies pass, officials said shipping had not been affected.

Meanwhile, another kidnapping in Nigeria's oil-rich southern region renewed concerns about stability in Africa's second-biggest oil producer, after Nigeria.

Gunmen late on Friday kidnapped a Lebanese man in Port Harcourt, police said. The man is a manager with Modant Marine, a shipyard service company operating in the Niger Delta.
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