Dip in oil prices continues

25-Jul-07

Oil prices continued to fall on worries that crude prices have risen too high in recent weeks. These worries have been coupled with speculation that comments by OPEC could usher a less bullish position on production and supplies. Light, sweet crude for September delivery dropped to US$74.05 a barrel in electronic trading on the New York Mercantile Exchange by midday in Europe. September Brent crude fell by almost one dollar to US$75.92 a barrel on the ICE Futures exchange in London. A comment that the fair price for crude oil is between $60 and $65 a barrel by head of research for the Organization of Petroleum Exporting Countries, has led many to conclude that OPEC may be open to reversing its long-held position that oil supplies are adequate. This comment follows OPEC's long standing belief this year that high oil prices are not its fault- a belief that has led to criticism on OPEC for cutting production this year. It is not yet clear whether production will be raised by OPEC by the end of the year.