World oil prices dropped below $89 a barrel mark in Asian trade Wednesday on demand concerns as US and major European economies struggled to recover from recent crisis.
Light sweet crude for October delivery was seen trading at $88.93 a barrel at 12.00 noon Singapore time while Brent crude was at $11.28 a barrel in London.
The European benchmark contract’s premium to U.S. futures was at $22.15, compared with a record close of $26.87 on Sept. 6.
Oil prices also suffered due to Tuesday’s American Petroleum Institute report of higher Gasoline inventories that climbed 2.76 million barrels last week.
The International Energy Agency Tuesday cut global oil-consumption forecasts for this year and 2012. US Energy Department will announce its weekly analysis report later Wednesday.
Analysts said the US and Europe are likely to take joint efforts to tackle the crisis in an environment where the euro zone debacle is overshadowing tightening supply.
They added that resumption of Libya’s oil exports are likely to delay more than expected though it could hardly make any difference in global supplies.
Meanwhile the greenback climbed about 0.5 percent against a basket of currencies in Asian trade Wednesday
On Tuesday, oiil prices were mixed asNew York's main contract, light sweet crude for delivery in October, soared $2.02 to close at $90.21 a barrel on the New York Mercantile Exchange.
Brent North Sea crude for October delivery dropped 36 cents to settle at $111.89 a barrel on the IntercontinentalExchange.
