Thursday July 23, 12:36 PM
Crude oil prices fall slightly
LONDON (AFP) - World oil prices fell slightly on Thursday as traders paused or took profits after a rally this week amid stubborn concerns about global demand, analysts said.
Brent North Sea crude for September delivery fell nine cents to 67.14 dollars per barrel.
New York's main futures contract, light sweet crude for September, dropped 16 cents to 65.24 dollars.
"The crude market needs to pause after the recent rally," said VTB Capital analyst Andrey Kryuchenkov.
He added: "Crude futures gained ground over the past week, pushing higher alongside other commodity markets on upbeat economic sentiment and a weaker dollar.
"It is important to note, though, that the rally was primarily driven by sentiment: fundamentally, little has changed, with persistent demand concerns."
Oil traded had mixed on Wednesday as renewed economic caution put the brakes on the market and traders digested news of a decline in US energy (USEG - news) stockpiles in line with forecasts.
Investors also focused on Federal Reserve chairman Ben Bernanke's comments about the recession-struck US economy, analysts said.
Bernanke told Congress in his semi-annual testimony on Tuesday and Wednesday the US economy was on the mend but the recovery was still fragile.
For the moment, investors are focusing on the upbeat portion of Bernanke's assessment of the world's biggest economy and number one energy consuming nation, analysts said.
"Fed chairman (Bernanke) said that recent data was encouraging and that it was premature to increase fiscal stimulus," said Dariusz Kowalczyk, chief investment strategist with SJS Markets financial firm.
He added: "This should further calm down market doubts in the 'green shoots' theory."
A drop in US crude stocks, as expected by the market, was also lending some support to prices with the decline seen as suggesting demand was picking up in the American economy.
The US Department of Energy (DoE) said in its weekly report Wednesday crude oil inventories sank 1.8 million barrels in the week ending July 17.
The DoE added that US gasoline reserves increased by 800,000 barrels and distillates, which includes heating fuel and diesel, rose 1.2 million barrels last week.
"Although crude stocks continue to fall, product builds remain, indicating demand is yet to pickup in a meaningful way," added David Hart, oil analyst at Hanson Westhouse.
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