Oil prices slide after recent bounce

June 30, 2011 | 21:01

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World oil prices slid on Thursday on profit-taking after soaring the previous day on easing concerns over Greece and signs of strengthening energy demand in the United States.

Brent North Sea crude for delivery in August sank $1.01 to $111.39 in early London trade, having rocketed by $3.62 the previous day.

New York's main contract, West Texas Intermediate for August, fell 37 cents to $94.40 a barrel.

Crude futures had surged on Wednesday after a vote in the Greek parliament eased worries about a destabilising default, while new data from the United States showed that US crude inventories had fallen.

The rally came after Greek lawmakers approved an unpopular austerity plan demanded by international creditors, staving off the threat of a default that could have knock-on effects throughout the eurozone.

The news cheered investors and caused the European single currency to rise against the dollar, which in turn buoyed the price of oil, analysts said.

The oil market has now regained most of the ground they lost after last Thursday's surprise announcement by the International Energy Agency that it was tapping strategic reserves to make up for lost Libyan output.

Separately on Wednesday, official data showed that US crude oil inventories fell by 4.4 million barrels last week, exceeding market expectations for a drop of 1.6 million barrels.

Falling oil inventories in the United States, the world' largest economy, indicate that US demand for energy is on the rise.

AFP

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