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Oil prices slip from $50 level

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NEW YORK: World oil prices dipped Friday, with traders taking profits after crude rose above the psychological $50 level this week on evidence of a fall in supplies.

In the United States, trader caution was high ahead of the long Memorial Day holiday weekend, when markets will be closed Monday.

“It’s a holiday weekend here and a lot of people are already out,” said Carl Larry at Frost & Sullivan.

US benchmark West Texas Intermediate for delivery in July fell 15 cents to $49.33 a barrel on the New York Mercantile Exchange.

In London, Brent North Sea crude for July finished at $49.32 a barrel, down 27 cents from Thursday’s settlement.

“The main thing is we really haven’t moved far from the $50 mark here. It’s lower but not a collapse, which is good,” Larry said. “I think we’re going to hold this level.”

Oil prices had topped $50 a barrel for the first time this year on Thursday as production disruptions in Canada and Nigeria eased short-term concerns about abundant global supplies.

Larry also cited next week’s OPEC meeting to discuss world production levels as a reason for the cautious market action. “I don’t think anybody wants to trade with too much risk here,” he said.

Most analysts predicted the June 2 meeting of the Organization of the Petroleum Exporting Countries would not produce action to address ample global supplies.

Saudi Arabia, the cartel’s kingpin, is expected to stick to its policy of fighting for market share with high crude output, Citi Futures analyst Tim Evans said.

“While the market fully anticipated that there will be no agreement to limit oil production, we still see the lack of an output cap as allowing OPEC production to trend at least somewhat higher over the next few months,” Evans said.

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