Oil prices slide in New York on profit taking

September 15, 2011 | 08:15

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Oil prices fell Wednesday in New York amid profit taking after a rally, as traders shrugged off a steep plunge in US crude stockpiles due mainly to bad weather in the Gulf of Mexico.

On the New York Mercantile Exchange, light sweet crude for delivery in October dropped $1.30 to close at $88.91 a barrel.

The benchmark WTI futures contract had added about $3 over the past two days, finishing Tuesday above $90 a barrel for the first time in six weeks.

Traders took profits after prices hit key technical levels, said John Kilduff at Again Capital.

In London, Brent North Sea crude for October gained, adding 51 cents to settle at $112.40 on the IntercontinentalExchange.

The WTI contract opened lower in New York, and losses accelerated after the publication of the US government's weekly data on the country's oil stockpiles.

Crude oil inventories slid by 6.7 million barrels last week, more than twice the amount expected by analysts, the Department of Energy reported.

But the plunge was mainly a result of production shut in when tropical storm Lee passed through the Gulf of Mexico, said Andy Lipow at Lipow Oil Associates.

Lipow said the market ignored the crude oil data and focused instead on a rise of petroleum products inventories, "which cast a bearish view."

Gasoline stockpiles, which analysts forecast would decline, rose by 1.9 million barrels amid weak demand that was 2.7 per cent lower than a year earlier.

AFP

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