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Oil Prices Drop Under $54 | ASHARQ AL-AWSAT English Archive 2005 -2017
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LONDON (AFP) – Oil prices fell below 54 dollars a barrel Tuesday on profit-taking after rallying a day earlier in line with a surging US stock market, analysts said.

Brent North Sea crude for delivery in July fell 65 cents to 53.93 dollars a barrel.

New York’s main futures contract, light sweet crude for June delivery dropped 59 cents to 53.88 dollars a barrel.

“The bullish leadership from the financial markets continues to have the upper hand in deciding the short term direction for crude,” energy analysts at ODL Securities said in a note to clients.

On Monday, “in the absence of Tokyo and London closed for holiday, it was left to the Dow Jones to provide guidance for the energy complex and consequently a sharp advance in the equities easily supported another rally in crude.

“A weakening in the US dollar was also a supportive catalyst…. Any potential decline in crude looks rather to be triggered by a sell off in stocks and/or a strengthening in the greenback,” they added.

World oil prices are steadying having slumped since striking record highs above 147 dollars in July 2008, as energy demand weakened due to the global economic downturn.

While prices have bounced back in recent weeks on early signs the worst may be over for the US economy, analysts have cautioned that the current global swine flu outbreak could set back any recovery.

However, recent data showing that manufacturing in China expanded for the first time in nine months in April should be supportive of oil prices as it means higher demand from the world’s most populous nation, analysts said.

The CLSA China Purchasing Managers Index, or PMI, a closely watched indicator in the world’s third-largest economy, rose sharply to 50.1 in April from 44.8 the previous month.