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Oil prices were little changed yesterday, with US crude still within sight of its record high as traders worried about further declines in hefty US crude stocks.
US crude dropped US6c to US$76.67 a barrel, adding to Monday's US19c decline after a day of volatile trade during which prices ranged between US$76.05 and US$77.33.
But after a seven-week, US$12 rally - fuelled by America's refinery troubles, a spurt of renewed fund investment and Opec's adherence to supply curbs - prices remain within sight of of last July's record US$78.40 a barrel.
London's Brent crude slipped US14c to US$75.60 a barrel, retaining a more than US$1 discount to the American marker.
"Oil prices are modestly lower, but I think upward price pressures remain fairly strong," said Commonwealth Bank of Australia old and gas analyst David Moore.
"Statements from Opec officials still do not point to an early increase in production, and there are concerns of a relatively tight supply situation later this year."
Weekly US oil inventory data tomorrow may provide more ammunition for bullish traders.
Analysts expect a further 1.1 million barrel decline in crude stocks, a preliminary Reuters poll has found.
Petrol stocks were expected to be up 700,000 barrels, and refinery capacity use up 0.6 of a percentage point.
Despite soaring prices and signs that hefty US crude stocks are beginning to ebb, the Organisation of Petroleum Exporting Countries has resisted calls by consumers to pump more crude, saying prices have gone up because of increased investor money rather than of inadequate supplies.
Current oil prices were inflated by about US$7 a barrel because of concerns about production bottlenecks caused by political instability in oil-producing countries, Opec's Secretary-General Abdullah al Badri was reported as saying on Monday.
Opec's second-largest producer, Iran, said on Sunday it did not expect the group to raise output at its next scheduled meeting on September 11.
American economic data showing that gross domestic product rose at a 3.4 per cent annual rate - the fastest since the first quarter of last year - has helped oil shake off some of the anxiety brought on by last week's two-day rout in global equity markets.
- REUTERS
