Oil prices dropped in New York for the first time in four days as investors sold futures to lock in gains on concerns prices have increased too far amid expectations of a fall in demand, Bloomberg reported.
Crude oil for September 2009 delivery dropped as much as $0.48, or 0.7%, to $67.90 a barrel in electronic trading on the New York Mercantile Exchange. It was at $68.19 a barrel at 11.31am Singapore time. In the past two weeks the prices have increased by 14%.
On 27 July prices rallied to a three-week high as equity markets increased in the US and Asia, signalling a potential economic recovery.
Investors who have made bets that oil will increase - so-called long positions - sell their contracts to make profits. The International Energy Agency said that crude demand for 2009 is forecast to decline 2.9%.
The MSCI Asia Pacific Index increased 0.3% to 109.33 as of 11.23am in Tokyo. Acceleration in China’s economic growth and better-than-expected US earnings have helped drive an 11% increase in the past 11 days.
Brent crude oil for September 2009 settlement dropped as much as $0.42, or 0.6%, to $70.39 a barrel on London’s ICE Futures Europe exchange. It was at $70.68 a barrel at 11.32am Singapore time. Yesterday it rose $0.49, or 0.7%, to $70.81 a barrel.
Brent is trading at a $2.44 a barrel premium to the West Texas oil contract in New York, the most since 13 April 2009.