Oil weaker on concerns over US economy

Oil weaker on concerns over US economy


Singapore: Oil prices were lower in Asian trade on 29 August, on renewed concerns that energy demand would be hit if US economic growth slips, dealers said.

At 11:03am (0833 IST), New York’s main contract, light sweet crude for October delivery, was 16 cents lower at $71.57 a barrel from $71.73 in late US trades the previous day.

Brent North Sea crude for October delivery was 20 cents lower at $70.35.

“It’s been slipping, driven by concerns about the economic health of the US market," said Victor Shum, a Singapore-based analyst with energy consultancy Purvin and Gertz.

Shum said traders are concerned about US economic health and its impact on oil demand, which is driving the oil market down.

Traders’ worries about demand from the US, the world’s biggest energy guzzler, resurfaced after a monthly survey showed US consumer confidence — a key gauge of economic well-being — fell amid a deepening housing market crisis.

Their worries were further compounded after US Federal Reserve policymakers agreed the housing sector will remain a drag on overall economic growth for some time, dealers said.

Despite the recent turbulence in financial markets, demand for oil is likely to remain strong and the Organisation of the Petroleum Exporting Countries cartel should increase its production, the Financial Times today quoted the International Energy Agency (IEA) as saying.

Prices in the $70 range wee “too high", the newspaper quoted the IEA’s deputy executive director, Wlliam Ramsay, as saying.

IEA is energy policy adviser to 26 wealthy member countries.