World oil prices dipped slightly on Tuesday in choppy deals as traders banked profits, one day after New York crude had soared more than $16 for its biggest-ever daily jump. The massive price surge on Monday was driven partly by hopes that a US plan to buy tainted mortgage-related assets would save the global economy from collapse and thus maintain strong demand for energy, dealers said. The rally was also driven by technical factors because the contract for New York oil deliverable in October had expired on Monday.
On Tuesday, New York's new main contract, light sweet crude for November delivery, shed $2.10 to $107.27 a barrel. The separate October contract had soared $16.37 a barrel to close at $120.92 on Monday after hitting an intra-day high point of $130. On Tuesday it fell back to $120.92. Monday's price surge in New York exceeded the previous record one-day rise of $10.75 dollars on June 6.
Oil had also been buoyed by the weak US currency, which makes dollar-priced oil cheaper for buyers using stronger currencies, stimulating demand.
Elsewhere on Tuesday, Brent North Sea crude for November delivery dived $2.26 to $103.78 a barrel, after jumping by $6.43 on Monday.
"Oil was lower, correcting after yesterday's meteoric and historic rise, with concerns about the US toxic debt bailout plan growing," said Michael Davies at the Sucden brokerage in London. "There are many, including us, who feel that the optimism we have seen since news of the plan broke last Thursday is unfounded.