Singapore: Oil prices fell to near $80 a barrel Thursday in Asia, extending losses from the previous day after an increase in US crude inventories suggested consumer demand remains weak.
Benchmark crude for May delivery was down 25 cents to $80.36 a barrel at midday Singapore time in electronic trading on the New York Mercantile Exchange. The contract lost $1.30 to settle at $80.61 a barrel on Wednesday.
The Energy Department reported on Wednesday that crude inventories rose by 7.3 million barrels to 351.3 million barrels last week. Analysts had expected an increase of 1.67 million barrels, according to a survey by Platts, the energy information arm of McGraw-Hill Cos.
Oil demand in Europe is worse off than the US, with France, Italy, Spain and the UK all seeing drops of more than 10% in January from a year earlier.
Some analysts are worried high jobless rates in the US and Europe will continue to drag on consumer demand.
“It’s reasonable to assume the unemployment rate in the US will remain stubbornly high for at least the next two years,” energy analyst Stephen Schork said in a report. “The table appears set for further demand destruction for gasoline, not just in the US, but in Europe as well.”
In other Nymex trading in April contracts, heating oil fell 0.37 cents to $2.067 a gallon, and gasoline was steady at $2.22 a gallon. Natural gas dropped 1.0 cent to $4.095 per 1,000 cubic feet.
In London, Brent crude was down 16 cents at $79.46 on the ICE futures exchange.