Oil prices dip to US$78 a barrel

Light, sweet crude for October delivery dipped to US$78.59 a barrel in Asian electronic trading on the New York Mercantile Exchange by midmorning in Singapore. In London, October Brent crude slipped to US$75.98 a barrel on the ICE futures exchange. This dip is an extension of the previous session's decline as more crude contracts were sold to lock in profits. On Friday, the contract fell by 99 cents to settle at US$79.10 a barrel -- the first decline in 10 sessions. This Energy investors have been concerned that credit tightness resulting from problems in the U.S. mortgage industry is spreading to other sectors, which could curb demand for oil and gasoline. Energy investors await the results of a meeting of the U.S. Federal Reserve scheduled for Tuesday when interest rates could get altered. The Fed is expected to lower interest rates the first time in four years to prevent a housing meltdown and keep tightening credit to prevent the economy slipping into a recession. Over the short term, a rate cut would provide an important psychological boost. It could make investors, businesses and others less inclined to clamp down or make drastic changes in their behavior that would hurt the economy.
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