SINGAPORE (AFP) — Crude oil prices were slightly lower in Asian trade on Wednesday after striking an all-time high near 127 dollars despite a forecast for slower energy demand growth, analysts said.
New York's main oil futures contract, light sweet crude for June delivery, fell 18 cents to 125.62 dollars per barrel.
The benchmark contract jumped to a record 126.98 dollars before settling at 125.80 dollars on Tuesday at the New York Mercantile Exchange. The contract had risen 1.57 dollars at the close.
Brent North Sea crude for June delivery fell 38 cents to 123.72 dollars a barrel, after closing at 124.10 dollars on Tuesday in London.
Crude oil prices have more than doubled in the past year and rocketed about 25 percent since the start of 2008, when they broke the 100-dollar barrier.
"The oil market has been holding steady since it rose yesterday... on concerns about distillate tightness in the market," said Victor Shum, an analyst at Purvin and Gertz energy consultancy in Singapore.
Oil prices remain high even though the International Energy Agency (IEA), energy policy adviser to major industrialised countries, cut its forecast for growth in global oil demand.
"What we've seen in this market since August is that any dip is eventually met by a short-covering rally that pushes prices to new highs," said AG Edwards analyst Eric Wittenauer.
"It is not a surprise to see prices struggle to show any kind of downward trend."
Shum said the market remains bullish, despite the IEA report, and turned his focus to the weekly report on US energy stockpiles due from the United States Department of Energy later Wednesday.
"The figures on crude and product inventory results will provide some direction," Shum said.
Paris-based IEA forecast in a monthly report that crude oil demand in 2008 would stand at 86.8 million barrels per day (bpd), 1.2 percent more than last year but about 390,000 bpd less than a previous estimate given in April.
The energy monitoring agency also said it now estimated world oil demand in 2007 at 85.8 million bpd, an increase of 1.1 million bpd or 1.3 percent on the 2006 figure but 150,000 barrels less than the April estimate.
Along with an inflow of investor funds, analysts have cited a variety of factors for this year's price spikes, including rising energy demand from Asian powerhouse economies China and India, and OPEC's refusal to pump more crude.
But analysts said the market was also looking overbought as threatened disruptions to Middle East supply have failed to materialise and as militant threats against oil company operations in Nigeria have been priced in to current values.
A group of Democratic Party Senators in the United States on Tuesday threatened to block a multi-million dollar US arms deal with Saudi Arabia unless the kingdom increases oil production and helps cut soaring gasoline prices.
The senators introduced a resolution of disapproval on the arms sale.
US President George W. Bush will raise the issue of high oil prices and their negative economic impact when he visits Saudi Arabia on Friday, White House spokeswoman Dana Perino said.
Saudi Arabia is the biggest producer in the Organisation of the Petroleum Exporting Countries (OPEC), which produces about 40 percent of the world's oil.
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