Oil prices extend slump, Brent drops under $120

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Oil prices fell further on Thursday amid evidence of weak energy demand in the United States, analysts said.

Brent North Sea crude for delivery in June slumped $1.77 to $119.42 per barrel in London trade.

New York's main contract, light sweet crude for June, shed $1.69 to $107.55 a barrel.

"Crude oil prices extended losses following renewed concerns about oil demand," said Myrto Sokou, an analyst at Sucden brokers in London.

Oil prices had already dived on Wednesday after a stronger-than-expected increase in US petroleum stockpiles sparked worries about demand in the United States, the world's biggest oil-consuming nation.

The US Department of Energy (DoE) said on Wednesday that stockpiles jumped 3.4 million barrels in the week ending April 29, beating analyst predictions for a gain of 3.2 million barrels.

A rise is seen as an indication of softer energy demand in the world's biggest economy.

Crude futures have slumped since the start of the week as traders fret about slower growth in big oil importers and mull the impact of the death of Al-Qaeda chief Osama bin Laden on global political risk in the market.

© 2011 AFP

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