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Oil prices ease after new record

Oil prices ease after new record
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First Published: Wed, May 14 2008. 11 37 AM IST
Updated: Wed, May 14 2008. 11 37 AM IST
Singapore: Crude oil prices eased in Asian trade on Wednesday after striking an all-time high near $127 despite a forecast for slower demand growth for energy, analysts said.
New York’s main oil futures contract, light sweet crude for June delivery, slipped eight cents to $125.72 per barrel.
The benchmark contract jumped to a record $126.98 before settling at $125.80 on Tuesday at the New York Mercantile Exchange. It had risen $1.57 at close.
Crude oil prices have more than doubled in the past year and rocketed about 25% since the start of 2008, when they broke the $100 barrier.
The latest spike followed a fall in prices earlier Tuesday after the International Energy Agency (IEA), energy policy adviser to major industrialised countries, cut its forecast for growth in global oil demand.
Brent North Sea crude for June delivery dropped 13 cents to $123.97 a barrel, after closing at $124.10 on Tuesday in London.
The Paris-based IEA forecast in a monthly report that crude oil demand in 2008 would stand at 86.8 million barrels per day (bpd), 1.2% than last year but about 390,000 bpd less than a previous estimate given in April.
The energy monitoring agency also said it now estimated world oil demand in 2007 at 85.8 million bpd, an increase of 1.1 million bpd or 1.3% on the 2006 figure but 150,000 barrels less than the April estimate.
Along with an inflow of investor funds, analysts have cited a variety of factors for this year’s price spikes, including rising energy demand from Asian powerhouse economies China and India, and OPEC’s refusal to pump more crude.
But analysts said the market was also looking overbought as threatened disruptions to Middle East supply have failed to materialise and as militant threats against oil company operations in Nigeria have been priced in to current values.
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First Published: Wed, May 14 2008. 11 37 AM IST
More Topics: Commodities | Energy | Oil | Brent Crude | Nymex |