Oil prices mixed on profit taking, euro worries

Oil prices closed mixed Wednesday on profit taking following Tuesdays strong gains and under pressure from concerns about the eurozone debt crisis that boosted the dollar.New Yorks main contract, light sweet crude for September, dropped 32 cents to finish at $93.35 a barrel.Brent North Sea crude for delivery in September settled at $112.14 a barrel, up 14 cents from Tuesdays close in London trade.The mixed results for the two markets came amid choppy trade, analysts said.Volumes were thin in New York, where a number of traders were off on summer vacation. A stronger dollar tends to dent demand for dollar-priced crude oil.Once again the focus for the crude oil market is on Europe and fears that the whole European monetary system is about to fail, said Phil Flynn at Price Futures Group.Worrisome economic news on the other side of the Atlantic supported the bearish outlook. Industrial output fell in June in Germany, the eurozones powerhouse, and the Bank of England slashed it 2012 economic growth forecast for Britain to near zero.Meanwhile, the United States, the worlds biggest oil consumer, still showed softer petroleum demand despite a big drop in crude inventories last week, according to the latest government report.The Department of Energy said crude stockpiles fell by 3.7 million barrels to 369.9 million in the week ended August.The four-week moving average of US demand for petroleum products was 18.9 million barrels per day, a 1.9 percent decline from a year ago.Elsewhere in the oil market, tropical storm Ernesto pummeled the Yucatan Peninsula and forecasters predicted it could pick up strength across Mexicos Bay of Campeche, the center of the nations vital offshore oil fields.The storm, which made landfall as a category one hurricane before being downgraded to a tropical storm, dumped heavy rain on the region, prompting fears of flash floods and mudslides.Pemex said that it was canceling some training exercises at oil rigs, but otherwise all operations in the region were normal, energy analyst Addison Armstrong of Tradition Energy said.