Oil slumps on profit taking

15/06/2009

Crude oil prices have fallen in New York and London this morning (June 15th) as trades sold off contracts to capitalise on the price surge witnessed last week.

In London, Brent futures dropped below $70 (£42) a barrel, while on the New York Mercantile Exchange light, sweet crude fell more than a dollar and was trading at $70.95 at 05:39 Eastern Time.

Speaking to Agence France-Presse, Victor Shum, senior principal of energy consultants Purvin and Gertz in Singapore, said that oil and other energy commodities such as heating oil are "ripe for a correction".

"Prices have rallied so much despite weak overall fundamentals [of supply and demand], so traders are taking profit," he said.

Heating oil prices also rose steadily last week, although they pared gains on Friday, dropping moderately along with oil.

Mr Shum added that rises and falls in the coming weeks will be influenced heavily by the strength of the dollar.