Singapore: World oil prices rose on Tuesday but remained well off record highs reached earlier this month, as the market watches for more signs of slowing demand, analysts said.
New York’s main contract, light sweet crude for September delivery, rose 36 cents to $125.09 a barrel after advancing $1.46 close at $124.73 Monday at the New York Mercantile Exchange.
Brent North Sea crude for September delivery was 42 cents higher at $126.26. The contract climbed $1.32 to settle at $125.84 on Monday in London
The benchmark New York contract has lost more than $22 while Brent has fallen more than $21 since both struck all-time highs above $147 on 11 July.
“It’s becoming very, very clear demand in the US is dropping,” said Jason Feer, vice president and Asia Pacific general manager for energy market analysts Argus Media Ltd.
“That demand is not going to recover in the short term,” he said.
Prices have eased recently while concerns mount about demand for oil in the face of prolonged weakness in the US economy, the world’s biggest energy consumer, analysts say.
Feer said the market is waiting for signs of whether demand is also slowing in China and India. Consumption in those two energy-hungry nations has helped keep prices high, he said.
Oil prices broke through the $100 level at the start of the year and then rose to a series of record highs on concerns about supply, stoked in part by tensions between the West and Iran over that country’s nuclear programme. Unrest in key African producer Nigeria was another factor.