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New York: Oil prices fell as much as $6 a barrel on Tuesday, bringing crude down $10 this week and hurling prices back to levels not seen since June 26. Traders, keeping a wary eye on the global economy, cashed in gains from oil's recent rally.
A barrel of light, sweet crude for August delivery fell $6.23 in morning trading on the New York Mercantile Exchange, following a $3.92 slide on Monday, and later traded down $5.79 at $135.58. The market's bearish turn this week erases, at least for the time being, the effect of a rally that pushed prices past $145 in a string of record-setting sessions before the Fourth of July.
August Brent crude also lost heavily, dropping by $5.31 to $136.57 barrel on the ICE Futures exchange in London.
Analysts attributed much of the recent sell-off to profit-taking, saying traders were cashing in on the previous week's gains. At the same time, concerns about supply disruptions subsided and fears that the economic slowdown is spreading moved to the forefront.
"Sagging global equities, which are tipping a lack of confidence in economic growth in both developed and emerging economies, helped trigger the retreat in the energy markets," Addison Armstrong, director of market research at Tradition Energy, said in a research note.
Still, analysts warned the pullback could be fleeting, saying it is a correction that could quickly shift and send prices bolting higher.
Trader and analyst Stephen Schork said the expectation just a few days ago that crude prices would touch $150 this week now "does not look like the proverbial done deal." "Be that as it may, we have seen this movie before, i.e. crude oil weakens a little and the bubble-bears jump in," he wrote in a daily market commentary, suggesting the price respite might be temporary.
Oil hit a trading record of $145.85 on last week before settling at a record close of $145.29 a barrel. On Monday, prices tumbled $3.92, or about 2.7 per cent, to settle at $141.37.
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