Crude oil prices slide further

17th November 2010, Comments 0 comments

Oil prices fell further on Wednesday, as traders set aside news of falling US energy reserves and fretted over concerns about European debt and speculation over Chinese monetary tightening.

New York's main contract, light sweet crude for delivery in December, shed 1.05 dollars to 81.29 dollars per barrel.

Brent North Sea crude for January fell 59 cents to 84.14 dollars a barrel in late afternoon London trade.

"Oil prices were under pressure ... as ongoing concerns about Ireland's debt have raised further doubts about the eurozone's economic stability, while China's fight against inflation has raised further worries about the levels of oil demand in the near-term," said Sucden analyst Myrto Sokou.

Traders meanwhile shrugged off news of surprise falls in US crude oil and gasoline or petrol stockpiles, which indicated strengthening demand in the key energy-consuming nation.

The US government's Department of Energy revealed Wednesday that American crude inventories tumbled by 7.3 million barrels in the week to November 12.

That was the biggest weekly drop for 15 months and compared with market expectations for a slender 100,000-barrel decline, according to analysts polled by Dow Jones Newswires.

Gasoline reserves sank by 2.7 million barrels. Analysts had predicted a smaller drop of 600,000 barrels.

Crude futures had slumped on Tuesday, weighed down by a strengthening dollar and ongoing European debt woes and inflationary pressures building in China.

Speculation is building over a possible rescue for Ireland after Greece was bailed out by the European Union and the International Monetary Fund with 110 billion euros in May.

Ireland faces crisis talks with a delegation from the European Commission, the European Central Bank and the International Monetary Fund on Thursday, as markets await news of a bailout.

The high-profile EU/IMF mission will seek an "intensive engagement" to try and stabilise the nation's deeply troubled banking sector, Finance Minister Brian Lenihan said Wednesday.

© 2010 AFP

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