Oil prices slip, but remain above 76 dollars

LONDON (AFP) - World oil prices dipped yesterday as traders cashed in profits after New York crude had surged close to a record close before the weekend, traders said.

In London, the price of Brent North Sea crude for September delivery slid 44 cents to 75.82 dollars per barrel in electronic deals.

New York's main futures contract, light sweet crude for delivery in September, fell 46 cents to 76.56 dollars per barrel in pit trading.

"Crude oil futures were lower (yesterday) on profit taking following Friday's surge on the back of strong US GDP figures," said Sucden analyst Michael Davies.

"We also consider that some of the optimism about the numbers may have been soured (for the oil market) by (Friday's) weak close on Wall Street."

The US economy expanded by 3.4 percent in the second quarter, the Commerce Department said, slightly ahead of the average Wall Street estimate of 3.2 percent.

Davies added: "The numbers calmed recent fears about the troubled (US) sub-prime mortgage crisis spreading to other markets and worries that oil demand growth could suffer as a result."

High-risk real-estate borrowers in the US sub-prime market have defaulted in large numbers on their mortgages, raising fears that financial institutions might tighten credit across the board, undermining conditions for growth.

Oil prices had jumped on Friday, with New York crude closing at 77.02 dollars as the US gross domestic product (GDP) data renewed concerns about supply in the face of anticipated demand from the United States.

Despite yesterday modest losses, world oil prices are nonetheless trading more or less within two dollars of intra-day peaks hit during the northern hemisphere summer last year.

"The near record-high prices have led to calls for OPEC to hike output, but at the moment OPEC remains unmoved by these pleas," Davies added.

Iran, the second largest producer in the Organization of Petroleum Exporting Countries after Saudi Arabia, on Sunday voiced opposition to any hike in output by the cartel.

Oil Minister Kazem Vaziri Hamaneh said current high prices were due to political concerns and a shortage of petrol (gasoline) in the United States amid the country's peak demand season for motor fuel.

"The recent fluctuation in the oil markets emanates from political and geopolitical reasons," Hamaneh said.

"In the current circumstances, an increase in oil production will not have any effect on oil prices. Therefore there is no reason for an OPEC production increase," he said, describing global production and storage of crude as "high."

OPEC is due to hold its next regular meeting on September 11 at its headquarters in Vienna.