Oil prices slide to one-month lows

4th August 2011, Comments 0 comments

Crude oil prices fell further on Thursday, hitting fresh one-months low points on persistent worries over the faltering global economy and the eurozone debt crisis, analysts said.

New York's main contract, light sweet crude for delivery in September, slipped 78 cents to $91.15 a barrel, having earlier touched a one-month trough at $91.05.

Brent North Sea crude for September shed 68 cents to $115.78 a barrel in London deals. It earlier struck a five-week nadir at $112.13.

Prices had fallen sharply on Wednesday on undcertainty over energy demand amid increasing concerns about debt-ridden Italy and Spain.

The energy market was also hit by more weak data in key crude consuming country, the United States, despite the deal to raise the government's official debt ceiling.

"Market participants are increasingly becoming uneasy about debt worries in the United States and the eurozone, where Spain and Italy shifted further into a poor light," said analysts at Vienna-based consultancy JBC Energy.

Traders are eagerly awaiting Thursday's weekly US jobless claims data, one day before crucial non-farm payrolls numbers on Friday.

The US government's Department of Energy had revealed on Wednesday that American crude reserves climbed by 1.0 million barrels in the week ending July 29. That suggested weaker demand in the world's biggest crude-consuming nation.

"The weekly oil report raised further concerns about a serious slowdown in the global oil demand and growth after showing large increases in crude and products stocks levels," said Myrto Sokou, an analyst at Sucden brokers.

Ernst and Young's head of Asia-Pacific oil and gas practice Sanjeev Gupta said crude markets were depressed despite this week's deal to raise the debt ceiling.

The agreement, which was signed into law Tuesday after bitter political wrangling, ensured Washington avoided a devastating default.

However, traders held "scant confidence that the compromise... will alleviate any of the economic anxiety in the US," Gupta stated.

"Other economic data released... painted an increasingly pessimistic picture," he added.


© 2011 AFP

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