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SINGAPORE: Oil prices slipped in Asian trading on Thursday amid
fresh concerns of weakening global growth, which could dampen energy
demand, analysts said.
Another factor in pulling down prices is the
firmer US dollar, which makes dollar-denominated commodities like
crude more expensive for foreign buyers, they said.
New York’s main contract, light sweet crude
for July delivery, dropped 25 cents to $122.05 a barrel. The
contract finished at $122.30 at the close of floor trading in the
United States on Wednesday after falling $2.01.
Brent North Sea crude for July delivery fell 39
cents to $121.71 a barrel following a drop of $2.48 to $122.10 in
London on Wednesday.
The Organization for Economic Cooperation and
Development (OECD), which groups 30 of the world’s leading
industrialized nations, slashed its growth forecast on Wednesday.
The move raised fresh worries that energy demand would weaken,
analysts said.
“It is very clear that the OECD countries are
going to see soft demand. All that is very bearish in terms of
energy demand,“ Jason Feer, vice president of energy market
analysts Argus Media Ltd. in Singapore, said.
Based on its twice-yearly survey, the OECD said
its member economies were confronting “three adverse
shocks”—financial market uncertainty, a housing downturn and
soaring food and energy prices. It predicted that momentum in the
industrialized world would slow to 1.8 percent this year, from 2.7
percent in 2007, and to 1.7 percent in 2009.
The OECD said the US economy was expected to
remain sluggish all year before staging a gradual recovery in 2009.
Latest figures from the US Department of Energy
showing a bigger-than-expected rise in petrol reserves was also a
sign of slowing demand, dealers said.
“In the US, people are not used to gasoline
being $4 [a gallon],” Feer said.
Analysts said the figures pointed towards
slowing demand in the world’s biggest energy-consuming nation as
consumers recoil from high gasoline prices.
India’s government on Wednesday boosted fuel
prices again to stem huge losses at state-run oil firms, stirring
widespread political anger and worries about higher inflation.
Malaysia announced similar moves as the
government there sought to ease the massive burden of fuel
subsidies.
Despite recent losses, oil prices have still
gained almost a quarter since they smashed through $100 a barrel at
the start of 2008, and traders remain worried that the high cost
could erode global energy demand.
Eleven nations that guzzle nearly two-thirds of
the world’s energy will hold talks in northern Japan this weekend,
seeking ways to secure enough supply and reduce consumption after
oil prices hit record highs.
The June 7 to 8 ministerial meeting brings
together China, India, South Korea and the Group of Eight (G8)
industrialized nations.
-- AFP
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