London - Crude oil prices diverged on Monday as some traders took profits, after the market had struck four-month highs before the weekend.
Brent North Sea crude for delivery in November fell 66 cents to $116.00 a barrel in London late afternoon trade.
New York's main contract, West Texas Intermediate (WTI) or light sweet crude for October, added 18 cents to $99.18 a barrel, reversing earlier losses.
“Crude oil was a touch lower this morning as traders took advantage of the strong rally we saw last week,” said analyst Fawad Razaqzada at trading group GFT Markets.
“Despite this pullback though, investors are still in the 'buy-the-dip' mode thanks to the promise of extra liquidity by the ECB and Federal Reserve.
“Hard assets and dollar-denominated commodities are some of major beneficiaries of quantitative easing and the fact that the Fed hasn't specified an explicit end date for its intervention makes it that much difficult to be a bear.”
The Fed said on Thursday it would start a third programme of bond-buying, by purchasing $40-billion a month in mortgage-backed bonds, known as quantitative easing (QE3), and would keep the scheme in place until it saw substantial improvement in the jobs market.
It also said it would extend its “Operation Twist” scheme of selling short-term debt and buying long-term bonds with the proceeds in order to keep long-term interest rates as low as possible.
The Fed move came a week after the European Central Bank said it would buy unlimited quantities of debt from under-pressure eurozone nations such as Spain and Italy in a bid to cut their borrowing costs, which had hit danger levels.
Oil prices had surged on Friday to their highest levels since early May after the Fed unveiled the new plan to boost economic growth in the world's largest crude-consuming nation.
Brent oil had soared to $117.95 a barrel and WTI crude hit $100.42 during intra-day trade.
Traders meanwhile digested news that manufacturing in the New York region contracted for the second month, as new orders dropped while prices accelerated, according to the Federal Reserve's regional index released on Monday.
The oil market remains well supported thanks to simmering geopolitical tensions in the Middle East.
“Recent developments in the Middle East have revived geopolitical risk, thus underpinning the recovery in the oil price from the low point seen in June,” noted VTB Capital economist Neil MacKinnon.
Anti-US demonstrations have been sparked across the oil-rich Middle East and other Muslim nations against a film deemed insulting to the Prophet Mohammed, spurring prices on fears over supplies of the black gold. - Sapa-AFP