Oil prices fall back from highs

A number of factors have lifted oil prices over $93 a barrel

Oil prices have fallen from record highs as full output resumes from Mexico and investors expect forthcoming data to show a rise in US stockpiles.

At the close of US trade, New York light crude was down $3.15 to $90.38 a barrel, compared with its all-time high of $93.80 during Monday's exchanges.

Oil prices had been pushed to record levels by supply concerns in Mexico, the weak dollar and tensions in Iraq.

London Brent was also lower on Tuesday, falling $2.88 to $87.44.

Turkish threats

Mexico was forced to halt one-fifth of oil production at the start of the week by a tropical storm hitting its Caribbean coast, but it now expects to resume full production by Wednesday.

We continue to have the Turkey-Kurdish situation, the geopolitical factors on top of supply concerns out of an overall tight market Energy analyst Victor Shum

The weak dollar also lifted oil prices, as this makes oil - which is priced in the greenback - cheaper to buy outside the US.

Further, oil investors have been casting a nervous eye on Turkey's ongoing threats to carry out a major military incursion into northern Iraq to attack Kurdish rebels.

Oil price rise graph

In past months there also have been concerns about the stop-start violence in Nigeria's main oil producing region, the international community's unresolved nuclear dispute with Iran, and concerns about heating supplies for the US winter.

'Simmering factors'

Despite Tuesday's falls, some analysts still expect crude prices to hit $100 a barrel before the end of the year.

"I think the market is still very bullish... we still have a number of simmering factors that are all quite potentially bullish," said Victor Shum, a Singapore-based analyst with energy consultancy Purvin and Gertz.

"We continue to have the Turkey-Kurdish situation, the geopolitical factors on top of supply concerns out of an overall tight market."

Official US data is expected to show on Wednesday that US crude stocks rose by 600,000 barrels last week.

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