India | UK | US

Oil falls $3, shrugs off U.S. supply drop

NEW YORK (Reuters) - Oil prices dropped $3 on Thursday as concerns about global energy demand and strength in the dollar countered a government report showing the biggest decline in U.S. stockpiles since 2004.
Posted : Thu, 29 May 2008 16:44:02 GMT
Author : Reuters
Category : US (Business)
News Alerts by Email ( click here )
US Business News | Home
NEW YORK (Reuters) - Oil prices dropped $3 on Thursday as concerns about global energy demand and strength in the dollar countered a government report showing the biggest decline in U.S. stockpiles since 2004.

U.S. crude fell $2.90 to $128.13 a barrel by 12:15 p.m. EDT after trading between $127.64 and $133.12 a barrel. London Brent fell $2.83 to $128.10.

The decline extends oil's retreat from last week's record over $135 a barrel amid growing signs that global energy demand growth is slowing under the strain of high costs and economic turmoil in the United States.

Gains in the U.S. dollar after a report the U.S. economy grew in the first quarter at a faster pace than previously estimated added pressure to commodity markets by diminishing the purchasing power of buyers using other currencies.

Oil had briefly surged into positive territory Thursday morning after the U.S. Energy Information Administration released a report showing an 8.8 million-barrel drop in U.S. crude stockpiles, the biggest fall since a hurricane shut offshore oil platforms in September 2004.

The EIA said the decline was due to delays in tanker movements along the Gulf Coast that bit into imports.

"Once again, on further review, we should not read too much into one week's report from the EIA," said Phil Flynn, analyst at Alaron Trading in Chicago.

Analysts in a Reuters poll had forecast the stock level to be unchanged.

Stockpiles at Cushing, Oklahoma, the delivery point of U.S. crude traded on the New York Mercantile Exchange (NYMEX), increased 700,000 barrels, according to the EIA, tempering the bullishness of the report.

DEMAND SLOWING

The EIA said on Wednesday U.S. oil demand in March fell to the lowest level for that month in five years, the latest sign that consumers are cracking under the strain of high oil prices.

In Britain, gasoline demand in April fell 7 percent from a year ago while diesel demand fell nearly 2 percent, government data showed on Wednesday.

Asian countries have also been reviewing fuel subsidies, which have sheltered drivers from the shock of steep price rises, intensifying fears of an Asian energy demand slowdown.

India's oil minister, Murli Deora, said on Thursday that the government will take a decision on raising fuel prices in the next two to three days.

Taiwan, Indonesia and Sri Lanka have already raised domestic fuel prices.

(Additional reporting by Ikuko Kao in London, Luke Pachymuthu in Singapore; Editing by Marguerita Choy)


(c) Reuters 2008. All rights reserved. Republication or redistribution of Reuters content, including by caching, framing or similar means, is expressly prohibited without the prior written consent of Reuters. Reuters and the Reuters sphere logo are registered trademarks and trademarks of the Reuters group of companies around the world.

Share/Save/Bookmark

Article : Oil falls $3, shrugs off U.S. supply drop
Print this article
Email this article

Stay Updated
News gadget on your Google homepage
Subscribe to a news feed in Google Reader



Have your Say
Name
Email
Subject
Your Comment

Enter Verification code
 
  

 

 

More US (Business) News click here
Follow The Earth Times
Subscribe to RSS Follow Earth Times on TwitterNews by email
Share/Save/Bookmark

 
 



 
Subscribe to free Earthtimes
News Alerts by Email Click here
For RSS Feeds Click here
or Create your own RSS

Add to Google Toolbar
Breaking News
Press Releases


The Earth Times
News Category

© 2009 www.earthtimes.org, The Earth Times, All Rights Reserved | Privacy Policy
Earth Times accept no responsibility or liability either directly or indirectly for views or opinions expressed in articles or comments.