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Oil prices fall after Egypt-fuelled hikes

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(GlobalPost/GlobalPost)

Oil prices fell on Thursday following recent rallies over Middle East supply worries after Egypt's army overthrew and detained President Mohamed Morsi.

Investors were closely watching to see whether the unrest would escalate and affect stability in the oil-rich and politically volatile Middle East region which neighbours north African nation Egypt.

Analysts said oil prices were weighed down also by a stronger dollar, which Thursday rallied against the euro and British pound after the European Central Bank and Bank of England indicated that their main interest rates would likely remain at record-low levels for some time.

Brent North Sea crude for delivery in August dropped 42 cents to stand at $105.34 a barrel in late London deals.

New York's main contract, West Texas Intermediate (WTI) light sweet crude for August, fell 14 cents to $101.10 a barrel. On Wednesday, the contract had hit a 14-month high point at $102.18.

"The risks of prolonged unrest in Egypt have diminished slightly after the ousting of President Morsi," said Fawad Razaqzada, analyst at traders GFT Markets.

"Crude oil has therefore eased off slightly following strong gains in recent days. However, risks of further unrest remain elevated, so prices are unlikely to fall back as quickly as they rose."

The Egyptian army on Wednesday toppled Islamist president Morsi after a week of unrest that killed nearly 50 people as millions took to the streets to demand an end to his turbulent year of rule.

While not a major crude exporter, Egypt is home to key oil choke points such as the Suez Canal and the Sumed Pipeline.

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http://www.globalpost.com/dispatch/news/afp/130704/oil-prices-fall-after-egypt-fuelled-hikes