Oil falls to near $71 on recovery worry
By CARLO PIOVANOFri Aug 28 01:05:21 EST 2009
Thu Aug 27 15:05:21 UTC 2009
Oil falls to near $71 on recovery worry
Eds: UPDATES prices. Moving on general news and financial services.
Associated Press Writer
LONDON (AP) - Oil prices fell to near $71 a barrel on Thursday,
dragged down by signs of faltering U.S. crude demand and concerns
the global economic recovery will be weak.
Benchmark crude for October delivery was down 33 cents to $71.12
a barrel by midday in Europe in electronic trading on the New York
Mercantile Exchange. On Wednesday it fell 62 cents to settle at
$71.43.
Oil briefly hit the $75 a barrel level Tuesday but failed to
break higher and has been sliding since then.
Investors are cashing out as new government data showed weak
demand with crude supplies rising last week in the United States,
the world's biggest energy user, said Tetsu Emori, commodity markets
fund manager at ASTMAZ Futures Co. in Tokyo.
"Reality is setting in. The latest U.S. data showed that
fundamentals in the oil market remain bearish," he said, adding
that oil prices could fall below $70 a barrel in the next few days.
The Energy Department reported Wednesday that U.S. crude
stockpiles rose by 200,000 barrels for the week ended Aug. 21. The
same report a week ago showed a large and unexpected draw on oil,
which sent prices soaring.
David Donora, executive director of commodities for London-based
Threadneedle, which manages about $80 billion in assets, warned
global oil demand could decline over the longer term given anemic
economic growth and high oil prices.
He said in a recent report that rising unemployment, high levels
of debt, increased savings and low economic growth may cause U.S.
oil consumption to dwindle in the next few years.
In other Nymex trading, gasoline for September delivery fell 1.37
cents to $1.9689 a gallon and heating oil fell 2.0 cents to $1.8320
a gallon. Natural gas shed 4.5 cents to $2.865 per 1,000 cubic feet.
In London, Brent crude fell 29 cents to $71.46.
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Associated Press Writer Eileen Ng in Kuala Lumpur contributed to
this report.
AP-TK-27-08-09 1315GMT
