Crude prices ‘could be poised for rapid fall’

Crude prices fell more than $1 a barrel Monday as hedge funds took profits after their rise to near-record levels.
Frederic Lasserre, head of commodities research at Société Générale, said that some hedge funds were sitting on huge gains and that profit taking could start a rapid downward spiral for oil prices.
The latest data from the Commodity Futures Trading Commission (CFTC) showed a fall in net speculative long positions – bets on further price appreciation – for crude in New York last week after they reached a record high in the preceeding week.
ICE September Brent fell $1 to $76.64 a barrel while Nymex September West Texas Intermediate sank $1.15 to $74.64.
Pressure is mounting on the Organisation of the Petroleum Exporting Countries to raise production quotas at its next meeting, in September.
“Opec is quite simply not producing enough oil,” said analysts at the Centre for Global Energy Studies. “The world is short of crude and Opec needs to relax its output restraints immediately if it really wants to ensure a balanced market with prices around $60 a barrel.”
Mohammed al-Hamli, Opec’s president, said there was little sign of high oil prices having any impact on global economic growth and that real oil prices were no higher than three decades ago. Opec also maintains that global stocks of crude are more than adequate as they stand well above their five year averages.
European wheat prices rose amid continued concerns that recent heavy rains and flooding will affect yields for this summer’s harvest. The November French milling wheat contract rose 3.1 per cent to €197.75 a tonne while in London, feed wheat gained 3.2 per cent to £128.00 a tonne.