Oil prices slide after record-breaking week

LONDON (AFP) - World oil prices fell yesterday as traders wrapped up a momentous week that saw New York crude strike a record high 78.77 dollars per barrel on concerns over US energy supplies.

New York's main futures contract, light sweet crude for delivery in September, tumbled 1.16 dollars to 76.67 dollars per barrel in US floor trading.

In London, the price of Brent North Sea crude for September delivery shed 19 cents to 75.57 dollars per barrel in electronic deals.

"Crude oil futures were trading down" yesterday, said Sucden analyst Andrey Kryuchenkov.

He added: "Concerns about tighter markets ahead remain and ... market participants seem keen to buy oil on any significant dip.

"Also in the back of our mind is the (US) Atlantic hurricane season and that it will only take one major storm to send prices sharply higher."

Crude futures had finished higher on Thursday, despite news of improving US refinery output, as traders looked to sliding crude inventories.

New York crude oil had soared to 78.77 dollars on Wednesday after the US Department of Energy said US crude stockpiles sank 6.5 million barrels in the week ended July 27.

That was nearly six times more than market expectations for a drop of 1.13 million barrels, and sparked fresh concern over tight global energy supplies.

Kryuchenkov added: "The problem is that while crude oil stocks are currently comfortable in the US, some analysts suggest that the market could be very tight later this year, if OPEC fail to act now."

On Wednesday, the head of the International Energy Agency (IEA) urged the OPEC oil cartel to increase production after crude prices hit a new record.

OPEC has resisted previous IEA appeals to pump more crude to keep oil prices down, arguing that higher prices reflect not supply tightness but rather refining problems in the United States and geopolitical tensions.

The next output meeting of the Organization of the Petroleum Exporting Countries is scheduled for September 11 in Vienna.

This week's all-time high in New York topped the previous record of 78.40 dollars set on July 13, 2006, when violence erupted between Israel and Lebanon.

It also beat Brent's all-time peak of 78.64 dollars per barrel, which was set on August 7, 2006.

Prices have also found support this weak from geopolitical tensions in key crude producers Iran and Nigeria, and potential risks to US energy facilities in the forthcoming North Atlantic hurricane season.