Oil prices ease in Asian trade

SINGAPORE: Oil prices were down in Asian trade on Wednesday, easing from seven-month highs as traders took profits, analysts said.

New York's main futures contract, light sweet crude for July delivery, fell 36 cents to 68.19 dollars a barrel.

Brent North Sea crude for delivery in July eased 41 cents to 67.76 dollars.

"It's just gone up too fast too quickly," said Tony Nunan, risk manager at Mitsubishi Corp in Tokyo, adding that he expected prices to rise in the short-term in tandem with the rally seen in global equities markets.

"The trend is up because equities are strong and the dollar is weak," said Nunan.

A weak US currency makes dollar-priced oil cheaper for holders of stronger foreign units, in turn stimulating demand and pushing up prices.

The market was also being affected by reports that some members of the Organisation of the Petroleum Exporting Countries (OPEC) were not adhering to agreed output cuts, another analyst said.

"There was definitely some profit taking in the overnight and early on, we did get some reports about OPEC output going up for the first time in several months," said John Kilduff of MF Global.

"So there was chatter in the market about cheating."

OPEC, which pumps 40 percent of world oil, cut its production target three times late last year to stabilise prices, which tumbled from record highs above 147 dollars in July to 32.40 dollars in December.

The group, which last week decided to keep output unchanged amid signs of economic recovery and higher crude prices, seeks to influence prices by setting an output quota, with members given individual production targets.