Oil prices slip from 4-month peaks

Crude prices slid on Monday as many traders took profits after oil hit four-month highs before the weekend. Brent North Sea crude for delivery in November fell 24 cents to $116.42 a barrel in London midday trade. New York's main contract, West Texas Intermediate (WTI) or light sweet crude for October, dropped 16 to $98.84 a barrel. IG Markets trading group said crude prices were still basking in the glow of the Federal Reserve's announcement that it would start a third round of bond buying to stimulate the economy, known as quantitative easing (QE3). "The big question is how long this Fed-inspired rally will continue as QE3 was the last bazooka to be used in the central bank's arsenal," it said in a report. "For the time being, it has given a powerful shot in the arm for global markets." Crude futures had surged on Friday to their highest levels since early May after the Fed unveiled new stimulus plans to boost economic growth in the United States, the world's largest crude-consuming nation. Brent oil had soared to $117.95 a barrel and WTI crude hit $100.42. The Fed on Thursday said it would start a third programme of bond-buying, by purchasing $40 billion a month in mortgage-backed bonds, 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 oil market meanwhile remains well supported thanks to simmering geopolitical tensions in the Middle East region. "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.