NEW YORK (CNN/Money) -
Crude oil prices topped $55 Monday. But they later slipped below $54 on profit-taking, after some analysts said prices may be near their peak and the Organization of Petroleum Exporting Countries (OPEC) said the cost of crude is expected to cut demand for oil next year.
U.S. crude for November delivery sank and closed at $53.67 on the New York Mercantile Exchange (NYMEX), down $1.26, after touching $55.33 a barrel overnight, a trading record. In London, Brent crude for December delivery lost 90 cents to close at $49.03 a barrel.
Some market analysts said crude oil was showing signs of peaking, with potential for further increases limited, adding that last week's dip in stock prices and some other commodity markets may also put a brake on oil prices.
"We believe that the peak is near, both in terms of level and timing. This should be between now and the month of December and be located between $55 and $60 for NYMEX crude," analyst Frederic Lasserre at Société Générale told Reuters.
OPEC actually raised its demand forecast for the rest of this year, but it said high prices would hit world economic growth -- and thus oil demand -- next year.
"Due to lower-than-anticipated global economic growth and the possible effect that price levels could have on demand, oil demand growth in 2005 has been revised down by 130,000 barrels per day (bpd) to 1.61 million bpd," the cartel said.
Strong demand and low inventories of some key products, such as heating oil, helped lift oil futures to new trading records early Monday before OPEC's statement.
"Everyone is worried it's going to be a very consumption-oriented fall and winter, and that's what's pushing prices higher," said Peter Beutel, oil analyst and president of Cameron Hanover.
He said that production in the Gulf of Mexico is still off about 460,000 bpd due to the lingering effects of September's hurricanes, hurting the inventories of various oil products.
Particularly hard hit have been supplies of home heating oil, Beutel said.
"We're off about 4.5, maybe 5 percent from where we were a year ago at this time," he said. "European stocks are also low. In the past, we had stocks high in one area and low in the other. This year, neither side of the Atlantic has much in the way of supply and that's raising concern."
Record oil prices are also raising concerns about the impact on overall economic growth.
"If high prices do continue much longer, they will certainly have a bite on GDP growth," Daniel Hynes, industry analyst at ANZ Bank in Melbourne, told Reuters."At the moment, we are at the stage where prices are really driven by short-term factors that the market has been dealing with for the last few months."
On Friday, Federal Reserve Chairman Alan Greenspan said oil prices are not likely to inflict as much economic pain as they did in the 1970s.
But the central bank chief did warn that prices have already cut about three-quarters of a percentage point from U.S. economic growth so far this year and warned: "The risk of more serious negative consequences would intensify, if oil prices were to move materially higher."
Beutel said history is maybe the best hope for oil prices being near a top. He said oil generally reaches a high at some point between Oct. 10 and Oct. 20.
"You don't make a top when things start to look bearish; you make it when things look bullish," Beutel said.
-- Reuters contributed to this report
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