praveen
09-07-2008, 07:10 AM
The price for a barrel of oil fell nearly $5 on Tuesday, a two-day swing of more than $8 as traders took profits and fears of a supply disruptions eased.
But analysts warned the pullback could be fleeting.
"The plunge is really a temporary bull correction and is viewed by the market as a buying opportunity," said Victor Shum, an analyst with Purvin & Gertz in Singapore. "We are also seeing the US dollar easing a bit ... and that has helped support oil pricing."
Trader and analyst Stephen Schork said the expectation just a few days ago that crude prices would touch $150 this week now "does not look like the proverbial done deal."
"Be that as it may, we have seen this movie before, i.e. crude oil weakens a little and the bubble-bears jump in," he added in his Schork report, suggesting the price respite might be temporary.
Sweet crude for August delivery fell $4.63 to $136.74 a barrel in electronic trade on the New York Mercantile Exchange. On Monday, the contract fell $3.92, or about 2.7 percent, to settle at $141.37 in New York.
Oil hit a trading record of $145.85 on Thursday before settling at a record close of $145.29 a barrel. There was no floor trade in the US on Friday due to the July Fourth holiday.
August Brent crude also lost heavily, dropping by $4.63 to $137.24 barrel on the ICE Futures exchange in London
Concern over the unruly oil market was a top priority Tuesday at a summit of industrialized powers in Rusutsu, Japan with leaders calling on petroleum suppliers to boost production and refining and to increase investment in oil exploration and output over the medium term.
The G-8 — which groups the US, Britain, Japan, France, Germany, Canada, Russia and Italy — also called for diversifying sources of energy and further efforts to improve energy efficiency.
But analysts warned the pullback could be fleeting.
"The plunge is really a temporary bull correction and is viewed by the market as a buying opportunity," said Victor Shum, an analyst with Purvin & Gertz in Singapore. "We are also seeing the US dollar easing a bit ... and that has helped support oil pricing."
Trader and analyst Stephen Schork said the expectation just a few days ago that crude prices would touch $150 this week now "does not look like the proverbial done deal."
"Be that as it may, we have seen this movie before, i.e. crude oil weakens a little and the bubble-bears jump in," he added in his Schork report, suggesting the price respite might be temporary.
Sweet crude for August delivery fell $4.63 to $136.74 a barrel in electronic trade on the New York Mercantile Exchange. On Monday, the contract fell $3.92, or about 2.7 percent, to settle at $141.37 in New York.
Oil hit a trading record of $145.85 on Thursday before settling at a record close of $145.29 a barrel. There was no floor trade in the US on Friday due to the July Fourth holiday.
August Brent crude also lost heavily, dropping by $4.63 to $137.24 barrel on the ICE Futures exchange in London
Concern over the unruly oil market was a top priority Tuesday at a summit of industrialized powers in Rusutsu, Japan with leaders calling on petroleum suppliers to boost production and refining and to increase investment in oil exploration and output over the medium term.
The G-8 — which groups the US, Britain, Japan, France, Germany, Canada, Russia and Italy — also called for diversifying sources of energy and further efforts to improve energy efficiency.