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Oil eases in Asia on concerns of falling global demand

Oil eases in Asia on concerns of falling global demand
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First Published: Tue, Jun 03 2008. 11 27 AM IST
Updated: Tue, Jun 03 2008. 11 27 AM IST
Singapore: Oil prices eased in Asian trade Tuesday, 3 June, on continuing concerns over global energy demand, dealers said.
New York’s main oil futures contract, light sweet crude for July delivery, slipped 46 cents to $127.30 a barrel.
The benchmark contract had closed at $127.76 on Monday at the New York Mercantile Exchange.
Brent North Sea crude for July dropped 71 cents to $127.31 per barrel, after settling at $128.02 on Monday in London.
Tetsu Emori, fund manager at Astmax Asset Management in Tokyo, said concerns over falling demand for oil worldwide would continue to weigh on the market despite positive economic data from the US.
“In the near term, prices will find support at $115,” he said.
Prices made a temporary rebound in later trade Monday after the publication of the Institute for Supply Management (ISM) index of manufacturing activity in the US.
The index rose to 49.6 in May, topping market expectations of a fall from 48.6 in April.
Although the reading still indicated reduced activity for the fourth straight month, it rose close to 50, above which readings indicate growth.
Crude oil has shed about $8 since striking record peaks of $135.14 in London and $135.09 in New York on 22 May.
New York crude plunged $5 last week, while London Brent shed $4, in line with a recovering US currency that makes oil less affordable for foreign buyers and therefore dampens demand.
Despite the recent easing in prices, the high cost of crude has sparked widespread international alarm and US-led calls for the Organization of the Petroleum Exporting Countries to produce more oil.
Benchmark crude prices burst through the $100 level for the first time at the start of the year.
Opec president Chakib Khelil on Saturday reiterated the cartel’s long-standing view that speculators and the weak dollar were partly to blame for runaway prices.
On Monday US Treasury Secretary Henry Paulson, touring the Gulf, called on oil-producing countries to open their oil markets to foreign investment.
“On the supply side, we are urging all oil producing countries to open oil markets to foreign investment, which would support faster and more efficient growth,” he said in a speech in the oil-rich United Arab Emirates.
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First Published: Tue, Jun 03 2008. 11 27 AM IST
More Topics: Oil | Light sweet crude | Brent | Energy | Opec |