Oil prices slip on profit-taking

By AFP

July 15, 2010 Updated Jun 14, 2009 at 9:41 PM CDT

Oil prices pulled lower Friday on profit-taking, one day after striking new 2009 high points on hopes of a rebound in the world's major economies, analysts said.

New York's main futures contract, light sweet crude for delivery in July, eased 64 cents to 72.04 dollars per barrel, after hitting 73.23 dollars on Thursday -- which was the highest level since October.

Brent North Sea crude for July delivery declined 59 cents to 71.20 dollars on Friday, after touching 72.27 the previous day.

Analysts said prices were likely to be on an upward trend in the short-term as investors continued to hold an upbeat view that the battered global economy, and especially the United States, was on the mend.

"Evidence of a turn in the (US) economy continues to mount," David Carbon, analyst with Singapore's DBS Bank, said in a report.

"Of all the improvements in the data, the most crucial has been the rise in consumption since December. Consumption drives all other demand and at the end of the day, production and jobs growth," he said.

The United States is the world's biggest energy user and its consumption patterns weigh heavily on global crude prices.

On Thursday, the International Energy Agency (IEA) in its latest June report raised projections for world oil demand by 120,000 barrels per day to 83.3 million in 2009, up from its 83.18 million forecast in May.

"These revisions do not necessarily imply economic recovery, but may reflect a slowing in previously sharp decline," the IEA said.

A recent 20-dollar surge in the oil price and unexpectedly strong US consumption were among signals that the recession may be easing, the IEA noted.

Oil had already topped 71 dollars on Wednesday as traders tracked plunging American crude reserves, a weak dollar and hopes of a recovery in global energy demand.

The US Energy Information Administration reported that US crude inventories had tumbled 4.4 million barrels last week -- which was far more than market expectations of a 700,000-barrel drop.

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