Oil prices languish under 72 dollars

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World oil prices languished under 72 dollars a barrel on Wednesday, with the market hit by weak demand concerns before the release of key energy data from top fuel consumer the United States.

New York's main contract, light sweet crude for October delivery, fell 13 cents to 71.50 dollars per barrel. The contract had earlier touched 71.32 dollars -- last seen at the start of June.

Brent North Sea crude for October rose one cent to 72.39 dollars a barrel in midday London trade.

Andrey Kryuchenkov at Russian financial services group VTB Capital said the market could fall further towards 71 dollars after Wednesday's upcoming energy inventories report and new home sales data in the United States.

"The downtrend remains intact," he said.

Investors were awaiting release of the Department of Energy's latest weekly data on US energy stockpiles.

Analysts expect the report to show that inventories of crude oil and distillates grew last week, but that gasoline stockpiles fell by nearly a million barrels, according to Dow Jones Newswires.

The oil market has been plagued this week by persistant worries that weakening US growth could curtail energy demand, traders said.

Financial markets were jolted Tuesday by data showing that existing US home sales plunged 27.2 percent in July to levels unseen in more than a decade, increasing concern about a double-dip recession.

The US is the biggest energy consuming nation and worries are resurfacing that crude demand will be affected if the world's largest economy veers off the recovery track.

"The shaky global economy continues to put pressure on crude prices," said Victor Shum, analyst at Purvin and Gertz energy consultants.

© 2010 AFP

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