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Tuesday, July 8, 2008

Oil drops sharply as supply worries subside

Oil prices tumbled nearly $4 a barrel Monday, erasing many of last week's record gains in a single session as concerns about potential supply disruptions eased.

Light, sweet crude for August delivery fell $3.92, or about 2.7 percent, to settle at $141.37 on the New York Mercantile Exchange. Earlier, the contract sank as low as $139.50, or $5.79 below Thursday's settlement price.

Traders drove prices sharply higher at the end of last week as they bet that conflict with Iran or some other event could cut supplies, and they didn't want to get caught unprepared over the long Independence Day weekend, analysts said. There was no floor trade Friday in the U.S. because of the July Fourth holiday.

As concerns about supply disruptions subsided, many traders on Monday sold off contracts they had bought as insurance last week.

After the last few weeks' run-up, however, analysts were skeptical that the drop signaled the start of a long-term decline. Prices set records in each of the previous six sessions.

"We're just moving into a new and higher trading range" of about $140 to $146 a barrel, said Jim Ritterbusch, president of energy consultancy Ritterbusch and Associates in Galena, Ill. "We'll probably consolidate there for a week or two ... then probably push back into new record territory."

Hunter claims United interest


Ajax striker Klaas-Jan Huntelaar has told Dutch media that he dreams of a potential move to United.

The highly-rated 24-year-old claims that the Reds have voiced an interest in securing his services, following his decision to reject a new contract at the Amsterdam giants.

"I know certain English clubs are following me, like Manchester United, who are very interested in me,' he said.

"I love clubs with great history like Ajax. I also love United. They are a club that make me dream, especially as Ruud van Nistelrooy did great things with them."

Huntelaar, nicknamed 'The Hunter', scored 36 goals in 39 appearances last season as Ajax finished runners-up in the Eredivisie.