Oil prices slip, but still above US$66 a barrel

Reports that several refineries were restarting shuttered units prompted traders to trim long positions, but market sentiment remained bullish.

"We might find a few reasons to take some profit off the table, but the bulls remain in full charge," said Phil Flynn, an analyst at Alaron Trading Corp and long a bull on oil.

The September crude contract fell 26 cents to US$66.60 a barrel in midday trading on the New York Mercantile Exchange.

The September Brent contract on London’s International Petroleum Exchange was up 13 cents at US$66.58 a barrel.

Among petroleum products, gasoline futures were hardest hit.

The September gasoline contract dropped 2.88 cents to US$1.9760 a gallon. The September heating oil contract was off only five points at US$1.9040 a gallon.

The losses came amid news of restarts at a string of refineries that have recently experienced outages. Among others, Chevron Corp said Sunday that a coker and a crude unit in its 260,000-barrel-a-day El Segundo refinery in California were in line for restart over the weekend.

Premcor Inc has restored some power at its 190,000 barrel a day Memphis refinery and the refinery’s main crude distillation unit is back in operation after a brief shutdown last week, a person familiar with the units operations said yesterday.

Another person familiar with operations at Sunoco Inc’s 330,000-barrel-a-day Philadelphia refinery said Sunday that repairs at the plant’s fire-damaged crude unit are expected to take at least until tomorrow.

The reports helped ease worries about summer fuel supplies. With at least 14 refinery outages of one kind or another reported since July 20, gasoline prices have jumped 32 cents, with futures on the Nymex topping the US$2 mark for the first time Friday.

Meanwhile, traders are keeping an eye on the brewing war of words between Iran and the US over Iran’s suspected nuclear weapons programme.

In the wake of Iran’s decision last week to resume uranium conversion, tensions have been rising.

However, Tehran has said it wants to give negotiations with the European Union a chance, and although US President George W Bush hasn’t ruled out military action against Iran, he has also indicated that he wants to find a diplomatic solution to a potentially explosive crisis.