Monday, November 29, 1999

Oil slips below $78 on profit-taking

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Oil prices eased in Asian trade as stock markets weakened and investors booked profits following a surge above USD 78 a barrel, analysts said.New York's main futures contract, light sweet crude for delivery in July, shed 55 cents to USD 77.12 a barrel while London's Brent North Sea crude for August delivery was off 22 cents at USD 77.92."Oil prices have eased a bit and this is consistent with the movement in equities," said Victor Shum, a senior principal with the Purvin and Gertz energy consultancy."It's not surprising that we are seeing declines at the same time that we are seeing some easing in the Japanese Nikkei stock index," he said.Japanese stocks opened lower today, with the headline Nikkei index losing 57.90 points or 0.58 per cent to 10,009.25 in the first minutes of trading.Shum said investors were also cashing in profits after oil prices rose for the third day running on Wednesday, with the New York contract reaching an intra-day peak of USD 78.13, its highest price since May 10."Oil pricing has been rallying for the past couple of days in line with the rally in equities and after these gains, investors are inclined to book some profits," Shum said.Prices had gained support from a surprise drop in US gasoline inventories, which stoked hopes for rising summer demand in the world's biggest energy-consuming nation.

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