Oil prices fell Monday as traders took profits after crude futures settled near an all-time high in the previous session.
Light, sweet crude for September delivery lost 30 cents to US$76.72 a barrel in Asian electronic trading on the New York Mercantile Exchange, midmorning in Singapore.
The contract rose USD 2.07 to settle at USD 77.02 a barrel Friday, on technical buying and news of faster-than-expected economic growth in the United States. The highest-ever settlement price for a front-month contract was USD 77.03 a barrel, set July 14, 2006. Last July, Nymex crude hit an all-time intraday trading high of USD 78.40 a barrel.
A U.S. Commerce Department report on Friday showed the U.S. economy grew by 3.4 percent in the second quarter, removing some of the concerns about economic growth that sent oil prices down Thursday in sympathy with Wall Street's plunge.
Some analysts have however, discounted the economic growth numbers as a factor in Friday's rally in oil prices, saying it was due largely to buying by large investment funds.
"The strong pricing we have experienced in recent days is primarily due to institutional investors plowing surplus cash into the oil market, not really due to physical issues," said Victor Shum, an analyst with Purvin & Gertz in Singapore, who added that Monday's decline was due to profit taking.
"There remains a lot of upward exposure, but in the immediate near term a reversal is highly possible," Shum said. "Global product demand remains strong and tight refinery capacity has been a factor driving crude oil futures."
Market participants are also monitoring comments by OPEC officials ahead of the next policy meeting Sept. 11 in Vienna. Several officials from OPEC, which pumps 40 percent of the world's crude, have acknowledged that oil prices are high but have been reluctant to consider a production increase, pointing to relatively high stockpiles in the U.S.
September Brent crude fell 41 cents to USD 75.85 a barrel on the ICE futures exchange in London.
Nymex heating oil declined 0.31 cent to USD 2.07 a gallon (3.8 liters) while gasoline futures lost 0.18 cent to USD 2.0999 a gallon. Natural gas prices rose 6.2 cents to USD 6.27 per 1,000 cubic feet.
Gasoline futures and U.S. retail prices have declined in recent weeks as investors have come around to a view that the refining industry is finally producing enough gas to meet demand after a spring in which the industry was hampered by an unusual number of unexpected outages.