NEW YORK (AFP) — World oil prices eased slightly Thursday but held near record levels a day after striking record highs on heightened concerns about a weak US dollar and tight supplies.
New York's main oil contract, light sweet crude for delivery in May, drifted 78 cents lower to close at 110.11 dollars per barrel a day after the contract had rocketed to an historic 112.21 dollars in intraday trade.
In London, Brent North Sea crude for May eased 27 cents to settle at 108.20 dollars per barrel, after earlier striking a lifetime peak of 109.98.
"Oil and gasoline made a run to new record highs but with demand falling dramatically, the big question is whether traders can see the light through the fog," said Phil Flynn at Alaron Trading who is calling for a drop in energy costs.
"Despite the oil market's indomitable strength, the path of rising prices and dramatically weaker demand is on an unsustainable path."
He added: For every boom in the history of oil, I will show you a bust. That's not to say that the current boom will bust today or tomorrow or even in the next six months, but I assure you it will bust."
Crude futures were boosted Wednesday after the US Department of Energy (DoE) reported that American energy stockpiles fell across the board during the week ending April 4.
US crude reserves slumped by 3.2 million barrels and gasoline or petrol inventories shed 3.4 million barrels, the DoE said. Both falls were higher than market expectations.
The sagging dollar had boosted prices, since oil is priced in the US currency, but the greenback saw some stabilization Thursday.
Mike Fitzpatrick at MF Global said some of the recent bullish data for oil could not be ignored by the market
"An upward revision in China's GDP for last year to nearly 12 percent is helping to keep the global demand outlook for oil fairly positive," he said.
"Participants were shocked by the ... decline in (US) crude oil stocks, since a rise was expected and the sharp decline in imports and rise in refinery runs certainly helped to tighten the supply picture for the market.
"The market will periodically be bothered by demand concerns but the decline in crude oil was so unexpected that it seems for now to have alleviated those worries," he said.
Copyright © 2009 AFP. All rights reserved. More »
