World oil prices turned down at the end of New York trading on Friday as the market shrugged off the feared impact of a hurricane on US drilling operations in the Gulf of Mexico, traders said.
But it was another topsy-turvy session at the end of a volatile week that saw prices reach new record highs, then plummet on Thursday's terrorist attacks in London, then rebound on hurricane concerns.
New York's contract for light sweet crude for August delivery dipped in late trade to end US$1.10 lower at US$59.63 a barrel, having hit a new record high of US$62.10 on Thursday.
In London, Brent North Sea crude oil for delivery in August closed down US$1.08 dollars at US$58.20 a barrel. The contract had hit a historic peak of US$60.70 dollars on Thursday ahead of the rush-hour explosions.
Wachovia Securities economist Jason Schenker said speculators had taken profits before Hurricane Dennis's expected arrival in the Gulf of Mexico this weekend, after it slammed into Cuba on Friday.
"If Dennis is not as strong as expected the risk of seeing prices fall is bigger than the risk of seeing them go higher," he said.
"The upward risk has been pretty much priced in," Schenker said.
Having killed two people in Haiti, the hurricane crashed ashore in central Cuba packing winds of 240km per hour, knocking out power and leaving serious damage.
Forecasters at the US National Hurricane Center warned that Dennis could pass dangerously close to Key West in Florida yesterday morning, on its way to the Gulf of Mexico where 116 oil platforms and rigs have been evacuated.
Earlier, oil prices had risen as Russian President Vladimir Putin promised an increase in Russian energy supplies after the G8 nations sounded the alarm over crude prices at the Gleneagles summit in Scotland.
"We will increase our deliveries of energy raw materials to the world market and we will work on developing nuclear energy," Putin said after the G8 voiced concern about the effect of "high and volatile oil prices" on the world economy.
Russia is thes biggest oil producer outside OPEC.
OPEC president Sheikh Ahmad Fahd al-Sabah said on Friday he would resume consultations with the cartel's ministers Saturday on a possible output boost.
Sheikh Ahmad, who is Kuwait's energy minister, said the 11-nation group would raise output by another 500,000 barrels per day if there was sufficient demand.
But he added: "I think there is no shortage in the supplies. I believe the market is well-supplied. There is almost over 1 million bpd per day of oversupply. We are allowing stocks to be built."
At a meeting in Vienna last month, OPEC decided to raise its production quota by 500,000 barrels per day to 28 million barrels per day on July 1 with the option of a second hike of 500,000 barrels per day before September.
After the oil markets closed on Friday, news emerged that the Dura oil refinery outside Baghdad had been hit by a mortar shell, causing a huge fire. The refinery supplies the Iraqi capital with most of its petrol.
Insurgents have repeatedly targeted Iraq's vital oil infrastructure in the hope of preventing the country's economic recovery, sending global oil prices higher in the process.
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