Oil sinks below $40

[tritsofme]

http://money.cnn.com/2004/05/27/markets/oil.reut/index.htm

Talk of increased production from Saudi Arabia and non-OPEC countries sends U.S. crude down 3.1%.
May 27, 2004: 3:51 PM EDT



NEW YORK (Reuters) - U.S. oil prices fell more than a dollar Thursday as OPEC's president said the cartel was considering a big output increase to make a "psychological impact.''

Energy Secretary Spencer Abraham also helped fuel the sell-off when he said he saw signs of extra supplies from Mexico, Nigeria and Russia, as well as those already promised by Saudi Arabia.

U.S. light crude for July delivery sank $1.26 to settle at $39.44 a barrel, extending profit-taking by speculators after oil hit a $41.85 last week, the highest in 21 years. London Brent shed 83 cents to $36.25 a barrel.


The drop in oil helped fuel a rally in the stock market, as investor worries that persistently high oil prices would dent economic growth -- and corporate profits -- were relieved, at least temporarily.




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