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Oil prices extend decline on worries of weakening demand

Oil prices extend decline on worries of weakening demand
AP
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First Published: Wed, Jan 16 2008. 10 56 AM IST
Updated: Wed, Jan 16 2008. 10 56 AM IST
Singapore: Oil prices fell further today amid a growing belief that the US economy is slowing and that energy demand will weaken as a result.
Also weighing on prices were expectations that a US government report to be released later today will show an increase in domestic gasoline stockpiles.
The US Commerce Department said yesterday the country’s retail sales fell 0.4 % in December. The drop was much worse than the 0.1 percent analysts expected and also evidence that not even holiday shopping could encourage wary consumers to spend freely.
The data helped send Wall Street plunging yesterday, with the Dow Jones industrials tumbling nearly 280 points, or 2.2%.
“The combination of the retail sales data and the stock market performance weighed down on the crude oil futures market,” said Victor Shum, an energy analyst with Purvin & Gertz in Singapore. “The main factor is really the concerns about the US slipping into a recession.”
Light, sweet crude for February delivery fell 14 cents to $91.76 a barrel in Asian electronic trading on the New York Mercantile Exchange by midmorning in Singapore. The contract fell $2.30 to settle at $91.90 a barrel yesterday.
Expectations that the Energy Department’s weekly inventory report would show supplies of refined products rose last week also weighed on futures prices.
Analysts were expecting crude to draw down by 300,000 barrels, the ninth straight draw, according to the mean forecast in an updated Dow Jones Newswires survey of 14 analysts.
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First Published: Wed, Jan 16 2008. 10 56 AM IST
More Topics: Oil | Asia | Crude | Energy | Markets |