Oil prices drop again

World oil prices skidded for the fifth straight trading day as a ceasefire in the explosive Iraqi city of Najaf encouraged traders to pursue a dramatic retreat.

New York's benchmark contract, light sweet crude for delivery in October, fell 37 cents to 43.10 dollars a barrel -- down 13 percent from Friday's all-time high 49.40 dollars.

Brent North Sea crude for October dropped 35 cents to 40.33 dollars.

"There was the news of the ceasefire in Iraq," said AG Edwards market analyst Bill O'Grady. But it was impossible to be sure that a relaxation of tensions in Najaf would halt attacks on Iraqi pipelines, he said, informs Channel News Asia.

According to the BBC News, the oil price surge has triggered massive speculative trading, but the recent peak may have persuaded many to realise their profits.

A revival in Iraqi production, to 2m barrels a day from the country's southern oil fields, has contributed to the decline, as have official US data showing better than expected petrol stocks.

News of a potential peace deal in Najaf, to end the three-week standoff between supporters of Shia cleric Moqtada Sadr and the US and Iraqi forces besieging the holy city, may take pressure off prices on Friday.

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