SINGAPORE: Oil prices fell to below $94 a barrel today in Asia amid concerns that US economic growth and crude demand could disappoint this year.Benchmark oil for August delivery was down $1.51 to $93.90 a barrel at late afternoon local time in electronic trading on the New York Mercantile Exchange. The contract gained $1.24 to settle at $95.41 yesterday.
In London, Brent crude for August delivery was down $1.81 to $112.40 a barrel on the ICE Futures exchange.
Federal Reserve Chairman Ben Bernanke warned yesterday that the US economy is weaker than previously forecast, and lowered this year’s gross domestic product growth estimate to 2.9 per cent from 3.3 per cent.
Bernanke also said the Fed doesn’t plan to extend a programme of Treasury purchases, known as quantitative easing. Analysts credit the policy with boosting monetary liquidity and helping push crude prices higher.
“Without the Fed making extensive asset purchases, we see the engine of inflation stalled out,” energy consultant Cameron Hanover said in a report. “That should affect oil prices longer term.”
Strong demand from emerging markets helped crude rise to almost $115 early last month. Demand growth in China, the world’s second-largest oil consumer, remains robust but has slipped slightly in recent months.
Chinese oil demand rose 8 per cent in May from a year earlier, the second month of single-digit growth after expanding more than 10 per cent per month between October and March, said Platts, the energy information arm of McGraw-Hill Cos. Crude consumption was also slightly less in May than April, Platts said.
Some analysts predict global demand will pick up in the second half and help push crude back above $100. – Agencies
