Oil falls to US$88

SYDNEY – Oil fell yesterday, extending the previous session’s decline on profit taking from record highs, but hovered near US$88 on simmering geo-political tensions and a weak dollar.

US light crude for November delivery fell 77 cents to US$87,83 a barrel in Globex electronic trading by 0027 GMT. US oil settled down 87 cents at US$88,60 a barrel on Friday, after touching an all-time high of US$90,07 earlier.London Brent crude fell 46 cents to US$83,33 a barrel.Analysts said oil’s decline came as a surprise as news over the weekend was mostly bullish and there were no bearish factors weighing on prices.”A possible explanation could be more profit taking or that investors are adopting a more cautious view about how tight the market will be in winter in the northern Hemisphere,” said David Moore, a commodities analyst at the Commonwealth Bank of Australia.US oil, which has rallied more than 10 per cent since October 8, has averaged just over US$67 a barrel this year and is climbing towards the inflation-adjusted high of US$101,70 hit in April 1980, a year after the Iranian revolution.The weakening dollar and surging energy costs have increased worries over the health of the US economy, already battered by the crisis in the subprime mortgage sector.Despite oil’s approximate US$2 slide since Friday’s record US$90,07 a barrel, analysts said mounting tensions between Turkey and Kurdish rebels in northern Iraq would continue to provide underlying support and keep prices close to record territory.Turkey vowed on Sunday to take tough action after Kurdish guerillas killed 17 of its solders, but said Washington had asked it to hold back for a few days more from sending troops to the rebels’ hideouts in northern Iraq.Nampa-ReutersUS oil settled down 87 cents at US$88,60 a barrel on Friday, after touching an all-time high of US$90,07 earlier.London Brent crude fell 46 cents to US$83,33 a barrel.Analysts said oil’s decline came as a surprise as news over the weekend was mostly bullish and there were no bearish factors weighing on prices.”A possible explanation could be more profit taking or that investors are adopting a more cautious view about how tight the market will be in winter in the northern Hemisphere,” said David Moore, a commodities analyst at the Commonwealth Bank of Australia.US oil, which has rallied more than 10 per cent since October 8, has averaged just over US$67 a barrel this year and is climbing towards the inflation-adjusted high of US$101,70 hit in April 1980, a year after the Iranian revolution.The weakening dollar and surging energy costs have increased worries over the health of the US economy, already battered by the crisis in the subprime mortgage sector.Despite oil’s approximate US$2 slide since Friday’s record US$90,07 a barrel, analysts said mounting tensions between Turkey and Kurdish rebels in northern Iraq would continue to provide underlying support and keep prices close to record territory.Turkey vowed on Sunday to take tough action after Kurdish guerillas killed 17 of its solders, but said Washington had asked it to hold back for a few days more from sending troops to the rebels’ hideouts in northern Iraq.Nampa-Reuters