Crude futures fell further yesterday as traders scooped up profits but US tycoon T Boone Pickens warned that prices will not drop below $100 a barrel again.
Crude futures fell further yesterday as traders scooped up profits but US tycoon T Boone Pickens warned that prices will not drop below $100 a barrel again.
Pickens also said the United States - the world's biggest consumer of petroleum products - should invest more in natural gas to cut dependence on oil imports.
Meanwhile, on the markets, US light, sweet crude fell as much as $6 a barrel yesterday, bringing crude down $10 this week and driving prices back to levels not seen since June 26. Traders, keeping a vigilant eye on the global economy, cashed in gains from oil's recent rally.
A firmer greenback also helped depress prices. Speculators tend to invest in oil futures when the dollar is weak as a hedge against inflation.
A barrel of US crude for August delivery fell $6.23 on the New York Mercantile Exchange, following a $3.92 slide on Monday, and later settled $5.33 down at $136.04. The market's bearish turn this week erases, at least for the time being, the effect of a rally that pushed prices past $145 in a string of record- setting sessions before the US Fourth of July holiday.
North Sea Brent for August delivery also lost heavily, settling $5.44 lower at $141.87 a barrel on the ICE Futures Exchange in London.
Analysts said much of the recent sell-off was due to profit-taking, saying traders were cashing in on the previous week's gains. At the same time, concerns about supply disruptions subsided and fears that the economic slowdown is spreading moved to the forefront.
"Sagging global equities, which are tipping a lack of confidence in economic growth in both developed and emerging economies, helped trigger the retreat in the energy markets," Addison Armstrong, director of market research at Tradition Energy, said in a research note.
Still, analysts warned the pull-back could be fleeting, saying it is a correction that could quickly shift and send prices surging higher.
