Oil prices take respite on upward march

SINGAPORE (AFP) - Oil prices eased slightly in Asian trade on Friday in a brief respite on their upward march, dealers said.

At 10:22 am (0222 GMT) New York's main oil futures contract, light sweet crude for delivery in August, was 12 cents lower at 75.80 dollars per barrel from 75.92 dollars per barrel in late US trades on Thursday after touching a fresh 11-month high.

Brent North Sea crude for September delivery eased 15 cents to 77.52 dollars a barrel.

"I think there will be an ongoing drift in prices just a bit higher," said Tobin Gorey, a commodities strategist with Commonwealth Bank of Australia in Sydney.

"There'll be zigs and zags," he said, explaining Friday's pullback.

"I'm sort of seeing, most days, people bumping up their oil price forecasts," which leads to positive market sentiment, Gorey said.

Analysts said prices are expected to remain supported by tight supplies.

Oil prices have risen strongly since last week when the International Energy Agency, policy adviser to 26 member countries, raised its 2008 forecast for oil demand by 2.5 percent to 88.2 million barrels a day.

The IEA has called for the OPEC producers' cartel to pump more crude, notably during the ongoing North American holiday driving season when many people take to the highways.

However, the Organisation of the Petroleum Exporting Countries has repeatedly insisted it does not plan to raise output.

Adding to supply worries, French oil group Total said Thursday that production at one of its fields off the coast of Angola had been cut in half because of an electrical generator problem.

It said that since Wednesday the Dalia offshore field was producing 120,000 barrels a day, down from 240,000 under normal conditions.

The group said the problem would be fixed in one or two days.

Gorey said the weakness of the US dollar, which slumped to a near-record low against the euro on Thursday, also partly explains why oil traders have bumped up their price forecasts.