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Oil prices slide on slowing demand

10 August 2009 08:02 (UTC +04:00)

Bakuâ€“ APA-Economics. Crude oil traded near a one-week low after gasoline futures declined on signs of slowing seasonal demand for auto fuel late in the U.S. summer, Bloomberg reported.

Oil had fallen from a five-week intraday high of $72.84 a barrel on Aug. 7 as the dollar is near a one-week high against the euro, eroding investor demand for commodities priced in the U.S. currency. Crude prices around $70 are â€œnot badâ€ and are necessary to maintain investment, OPEC President Botelho de Vasconcelos told reporters in Angola yesterday.
Crude oil for September delivery was at $71.08 a barrel, up 15 cents, in after-hours electronic trading on the New York Mercantile Exchange at 1:12 p.m. in Singapore.
The contract declined 1.4 percent to $70.93 a barrel on Aug. 7, its lowest settlement in a week, as the dollar climbed and gasoline futures fell the most in seven sessions. Futures closed at $70.93 on Aug. 7, the lowest settlement since July 31.
New York oil futures gained 89 percent the past six months as rising equity markets buoyed investor confidence, and the falling U.S. dollar made commodities more attractive. Prices reached an eight-month high of $73.38 a barrel on June 30.
Brent crude oil for September settlement was at $73.94 a barrel, up 35 cents, on Londonâ€™s ICE Futures Europe exchange at 12:43 p.m. Singapore time, after falling as low as $73.20.
The dollar traded at $1.4198 per euro from $1.4183 in New York on Aug. 7, when it rose to $1.4155, the highest level since July 31.
The dollar remains a â€œkeyâ€ driver for energy prices and oil is unlikely to set fresh highs this year unless the currency resumes its decline, Hassall said.
Weak demand through late summer and the â€œmassive overhang of stockpilesâ€ in the U.S. may also limit any price gains from storms and hurricanes in the Gulf of Mexico, he said.