Oil Prices Lower on Profit-Taking in Asian Trade

Oil prices fell in Asian trade Monday on profit-taking after significant gains last week following OPEC's move to cut production further, dealers said.

At 2:09 pm (0609 GMT) New York's main contract, light sweet crude for January delivery, was down 28 cents to 63.15 US dollars a barrel from 63.43 dollars in the United States Friday.

Brent North Sea crude for February delivery also fell 28 cents, to 63.21 dollars.

"Last week, the market was overbought so some profit-taking is taking place today," said Tetsu Emori, chief commodities strategist with Mitsui Bussan Futures in Tokyo.

Prices should perk back up to the 64-65 dollar range once the profit-taking phase is completed, he said.

The 11-member Organisation of the Petroleum Exporting Countries decided last Thursday to cut output by 500,000 barrels per day (bpd) from February.

OPEC's decision in Abuja, Nigeria, followed a reduction of 1.2 million bpd that became effective last month. Analysts said the move signalled the cartel, which produces about 40 percent of global oil supplies, intended to shore up prices which are down from a July peak of more than 78 dollars.

The cartel has been concerned recently about bulging worldwide inventories and anticipated non-OPEC supply growth in 2007. However, it has also sought to prevent an oil price spike that will damage world economic growth.

The influence on oil prices of the OPEC cut announced on Thursday will largely depend on whether the cartel succeeds in reducing actual production, analysts believe.

Oil prices found considerable support last week from news that crude stockpiles in the United States -- the world's biggest consumer of energy -- fell across the board.

The US Department of Energy said last week crude oil reserves fell 4.3 million barrels to 335.4 million in the week ended December 8 while    distillate products, including heating oil and diesel fuel, were down 500,000 barrels to 131.9 million.

However, milder-than-normal temperatures so far this year have meant lower winter fuel demand, limiting the upside to prices, according to analysts.

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