Oil price slip on US demand concerns
World oil prices fell on Thursday as traders focused on weak demand data from the United States, the world's biggest consumer of energy.
New York’s main contract, light sweet crude for delivery in June, dropped 24 cents to 83.44 dollars a barrel.
Brent North Sea crude for June slipped six cents to 85.64 dollars in late afternoon London trade.
“The US weekly data was on the weaker side, with inventory builds across the crude and all the product barrels, along with relatively soft demand figures,” said Barclays Capital analyst Amrita Sen.
The US Department of Energy (DoE) had announced on Wednesday that US crude reserves increased 1.9 million barrels in the week ending April 16. This was against market expectations for a drop of 200,000 barrels.
“The increase in crude inventories was largely unexpected so demand fundamentals are weighing on people’s minds,” Serene Lim, a Singapore-based oil analyst with ANZ Bank, told AFP.
Demand in the United States is closely monitored by the oil market because it is the world’s biggest economy and its biggest energy consumer.
The giant US economy is struggling to recover from its worst downturn since the 1930s.
Elsewhere, a bomb planted by insurgents in northern Iraq on Thursday blew a hole in an oil pipeline that carries crude to Turkey, causing a blaze that firefighters were fighting to control, police said.
The incident occurred in the desert region of Al-Hadhar, 120 kilometres (75 miles) south of the city of Mosul, said provincial police Colonel Hossam Aldeen Mohammed.
The pipeline, which was last hit on December 20 last year, transports around 420,000 and 450,000 barrels of crude per day, although it has the potential to ship 600,000 bpd, according to the oil ministry.
In Kuwait meanwhile, oil reserves in the country’s largest oilfield, Burgan, are higher than have been published and new figures for all reservoirs are to be announced soon, a minister said on Thursday.
“Reserves in Burgan oilfield are much higher than what is being circulated,” deputy premier for economic affairs Sheikh Ahmad Fahad al-Sabah was cited as saying by the official KUNA news agency.
Greater Burgan oilfield is the world’s second largest field after Ghawar in Saudi Arabia, with reserves previously estimated at around 70 billion barrels.
It has been producing about three-quarters of Kuwait’s output of 2.2 million bpd.
Oil prices had tumbled on Monday amid concerns over fraud charges against Wall Street icon Goldman Sachs and the closure of European airports due to ash from a volcano in Iceland.