Oil Prices Steadily Rising

World oil prices slid yesterday on profit-taking after soaring overnight to $82 per barrel, striking a one-year peak on the back of sliding US energy reserves and the weak greenback, traders said.

New York's main contract, light sweet crude for December delivery, fell by $1.28 to $80.09 a barrel. The contract had touched $82.00 exactly on Wednesday, a level last seen on October 14, 2008.

Elsewhere on Thursday, Brent North Sea crude for December delivery dipped by 1.21 to $78.48, after reaching a high of 80.26 the previous day.

Both contracts had risen in value on Wednesday, lifted by a drop in US energy stocks, which was seen as a sign of improved demand in the world's biggest energy user.

Data released Wednesday by the Department of Energy showed US gasoline reserves sank by 2.3 million barrels in the week to October 16. That was more than the 800,000 barrel drop expected by most analysts.

Oil has been rising steadily in recent days, fuelled by a weak US currency, which makes dollar-priced crude cheaper for holders of stronger foreign units.

But there are doubts on whether oil prices can be sustained at levels above $80 given the fragile state of the global economy, despite some signs of a recovery.

'We remain cautious about the sustainability of the oil price in the near term,' analysts from the Commonwealth Bank of Australia said in a report.

Oil prices tumbled from historic highs of more than $147 in July 2008 to about $32 in December because of the global recession but have since risen on hopes of recovery.

Meanwhile in London on Thursday, OPEC secretary-general Abdalla Salem El-Badri said that the cartel will consider ramping up crude oil production at its next meeting in December if key conditions are met.

The cartel 'will not hesitate to increase its production in December', he told reporters, adding the decision was dependent on higher oil prices, improving economic growth and no floating storage of crude.

— AFP