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SINGAPORE: World oil prices eased slightly in Asian trade on Friday
after sharp earlier falls triggered by concerns about falling demand
in the United States and other developed countries, analysts said.
New York’s main oil futures contract, light
sweet crude for July delivery, was 49 cents lower at $126.13 a
barrel after losing a hefty $4.41 to close at $126.62 in New York
trading Thursday.
Brent North Sea crude for July delivery was 24
cents lower at $126.65 a barrel following a slide of $4.04 to
$126.89 on Thursday in London.
The slide in prices came after both contracts
struck historic peaks a week ago. Brent hit $135.14 and New York
prices reached $135.09 on tight supply fears.
“I guess the market’s sort of factoring in
the growing unders-tanding that demand in the US is just not gonna
recover,” said Jason Feer of energy market analysts Argus Media
Ltd. in Singapore.
Prices initially jumped higher Thursday after a
weekly report on United States energy stockpiles. Values then
tumbled as some analysts questioned if energy demand was dropping
amid sky-high prices.
In its report, the US Department of Energy (DOE)
said American crude reserves slumped 8.8 million barrels in the week
ending May 23.
Feer said analysts concluded there had been a
problem unloading stocks of crude because of fog at US terminals,
and in fact there is a lot of oil “sitting in tankers offshore.”
Gasoline or petrol stockpiles tumbled 3.2
million barrels, the Energy department said. Market expectations had
been for no change.
The DOE report was published one day later than
usual due to a public holiday in the United States on Monday.
Despite decreasing demand in the West, Feer said
prices remain supported by continuing strong demand from China,
India and the Middle East.
French Economy Minister Christine Lagarde has
written to her counterparts in the top industrial powers urging the
Group of Eight countries to call on oil producers to hike
production, her office said Thursday.
“We should urgently reiterate our call on oil
producing countries to increase their production levels in order to
alleviate tensions in the oil market and better anchor
expectations,” she wrote in the letter, the text of which was
released by her office.
The Organization of the Pet-roleum Exporting
Countries (OPEC), which pumps 40 percent of the world’s oil, has
proven reluctant to bend to US-led demands for it to produce more
crude to help cool prices.
-- AFP
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