Oil falls as profit-taking clips rally
NEW YORK (Reuters) - Oil prices fell on Friday as U.S. economic concerns mounted and traders took profits from a rally this week that sent prices to near record levels. U.S. crude settled down 62 cents at $96 a barrel, after trading as high as $97.92. London Brent settled 90 cents lower at $93.88 a barrel.
The fall -- on tight U.S. supply and escalating geopolitical tensions after the assassination of Pakistani opposition leader Benazir Bhutto on Thursday -- clipped gains that added more than $5 to prices since December 20.
"I think that people were booking profits ahead of the weekend," said Eric Wittenauer, an analyst at AG Edwards.
Concerns about the effects of U.S. economic problems on oil demand in the world's top consumer have helped keep crude below the all-time high of $99.29 a barrel struck on November 21.
Data released Friday that showed a 9 percent decline in sales of new U.S. homes last month heightened concern about the economy, putting the dollar on track for its worst week in more than a year.
A Thursday report from the U.S. government showing unexpectedly large draws in crude and distillate inventories fueled gains earlier in the day, as crude stocks dropped to the lowest level in nearly three years.
The assassination of Bhutto stoked geopolitical concerns, although Pakistan is not a major crude producer and unrest there was unlikely to directly affect oil flows.
The Bhutto assassination also triggered a flight to less risky assets, such as gold, which rose to a one-month high, and prompted a further drop in the dollar.
Oil has rallied more than 50 percent since the start of the year, although the credit crisis and forecasts for above average temperatures this winter have raised demand concerns.
Turkish raids on Kurdish guerrilla targets in northern Iraq have also supported prices by raising the risk to regional supply, although most of Iraq's oil exports flow via its southern ports.
(Reporting by Matthew Robinson in New York, Alex Lawler in London and Jonathan Leff in Singapore; Editing by Walter Bagley)
- U.S. war veteran released by North Korea returns home |
- Pennsylvania newlyweds "just wanted to murder someone together:" police
- Ice storm causes blackouts, delays in Texas, Arkansas
- WTO overcomes last minute hitch to reach its first global trade deal
- China's parliament: Japan has "no right to criticize" air defense zone