Oil prices tumble as supply concerns ease

LONDON (AFP) - World oil prices fell sharply yesterday, retreating further from near record peaks owing to an improved outlook for energy supplies, traders said.

Crude futures have fallen in the wake of news over the weekend that the Organization of the Petroleum Exporting Countries could raise its crude output to prevent runaway prices.

In London yesterday, Brent North Sea crude for September delivery sank 1.60 dollars to 75.26 dollars per barrel in electronic deals.

New York's main oil futures contract, light sweet crude for delivery in September, plunged 1.54 dollars to 73.35 dollars per barrel in floor trading.

"Crude futures were lower (yesterday), extending losses from the previous session and dipping below 76 dollars per barrel in London," said Sucden analyst Andrey Kryuchenkov.

"The market remains under pressure from fresh comments from OPEC, with the group saying that high oil prices could be a concern."

OPEC is scheduled to meet on September 11 in Vienna, Austria, home to the 11-nation cartel's headquarters.

"Many investors now speculate that the group might consider increasing output at its September meeting," Kryuchenkov added.

OPEC has repeatedly said that the market was awash with adequate oil supplies, despite calls from the International Energy Agency to pump more crude.

However, OPEC President and United Arab Emirates Energy Minister Mohammed al-Hamli said on Sunday that surging prices were concerning -- and that the group was prepared to pump more oil if needed.

Victor Shum, senior principal at Purvin and Gertz Inc in Singapore, said speculators also decided to take quick profits on Tuesday after recent bumper gains that came close last week to smashing historic records.

"When there are so many speculators in the market, the market is vulnerable to a reversal," Shum said.

News of several US refineries restarting after a busy maintenance season has also sent prices lower, analysts said.

In recent weeks, rising demand, geopolitical tensions and infrastructure problems have all pushed oil to prices not seen in nearly a year, in turn attracting speculators who are pushing the market up even further.

Traders are also looking ahead to Wednesday's weekly report from the US Department of Energy.

The focus will be on gasoline or petrol supplies in the United States, which are under pressure from the so-called driving season -- when many Americans take to the highways for summer vacations.