Oil price recovery fades

23rd August 2010, Comments 0 comments

World oil prices fell once more on Monday, hitting near six-week lows after failing to sustain early gains won on the back of a weaker dollar.

New York's main contract, light sweet crude for delivery in October, dropped 68 cents to stand at 73.14 dollars a barrel.

Brent North Sea crude for October shed 67 cents to 73.59 dollars in late London trade.

"Oil prices remain under pressure from worries of economic slowdown, with a slowdown in Chinese oil demand growth in July, despite the robust underlying figures, likely to add a further layer of pessimism," said Barclays Capital analyst Amrita Sen.

Crude futures had pulled back from around six-week lows early on Monday to stand above 74 dollars. They had meanwhile fallen on Friday for a third straight session amid worries that weakening growth in the United States could curtail energy demand. The US and China are the world's two biggest energy consumers.

Prices at current levels meanwhile threaten economic recovery as well as a pick-up in energy demand, consultancy CGES warned on Monday.

But OPEC -- the cartel which can help influence price movement by altering the level of oil output levels, is happy with current prices, the Centre for Global Energy Studies (CGES) said in a monthly market report.

"At present, OPEC is in a position to keep oil prices where it would like to see them but this comes at a cost," it said

"The cost is that the global economy will recover more slowly and the oil market will not grow as fast as it would have done with more moderate prices."

The Organization of Petroleum Exporting Countries, whose 12 member nations pump about 40 percent of the world's crude, meets periodically to set output levels with a view to maintaining revenues and investment levels.

The next formal meeting of OPEC to discuss production is due on October 14 in Vienna.


© 2010 AFP

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