KUALA LUMPUR, AP
Oil prices fell Wednesday in Asia as traders locked in profits after crude rose above US$90 a barrel for the first time in more than two years. Benchmark oil for January delivery was down 86 cents to US$87.83 a barrel at late afternoon Kuala Lumpur time in electronic trading on the New York Mercantile Exchange. The contract hit US$90.76 on Tuesday, the highest price since Oct. 8, 2008 before pulling back to settle at US$88.69, down 69 cents. The pull back is not surprising, said Victor Shum, an energy analyst at consultancy Purvin & Gertz in Singapore. “It is primarily profit-taking after crude breached the US$90 level in New York.” In other Nymex trading in January contracts, heating oil fell 1 cent to US$2.46 a gallon, gasoline futures gave up 1.4 cents to US$2.31 a gallon and natural gas rose 1 cent to US$4.41 per 1,000 cubic feet. In London, Brent crude fell 46 cents to US$90.93 a barrel on the ICE Futures exchange.
The rally Tuesday came as U.S. President Obama and Republican leaders hammered out an agreement to extend Bush-era tax cuts. A cold snap also swept through Europe and the U.S., lifting demand for fuel. Some analysts now predict that oil will hit US$100 per barrel sometime next year. They point to rising demand from China and other emerging economies. OPEC countries can crank up production to meet that demand now, but their ability to do that is expected to decline over the next few years.