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Oil Prices Fall Amid Weak Crude Demand | ASHARQ AL-AWSAT English Archive 2005 -2017
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LONDON, (AP) — Oil prices slipped on Friday as demand for crude remained fragile despite increased signs of a global economic recovery, dealers said.

New York’s main futures contract, light sweet crude for delivery in August, fell 23 cents to 61.79 dollars a barrel.

Brent North Sea crude for September delivery shed 41 cents to 63.34 dollars a barrel in morning London trade. The August contract had expired on Thursday, priced at 62.75 dollars.

Crude futures have bounced back above 60 dollars this week on official data pointing to economic recovery in the United States and China, the world’s two biggest energy consuming nations.

“Things are looking better, but the markets are still looking shaky,” said Ben Westmore, a minerals and energy economist with the National Australia Bank.

He said the oil market was taking “two steps forward, one step back” as traders are more prone to engage in profit-taking whenever prices shoot higher.

“When you get a price increase, there will be investors thinking that it will be a good time to sell off and that’s what’s happening,” he said.

Dealers noted that overall crude demand worldwide remained weak and supplies were plentiful despite a drop in US energy inventories.

Oil prices had closed with a gain of more than two dollars on Wednesday, lifted by a drop in US crude inventories.

The Department of Energy said US crude oil reserves had sunk by 2.8 million barrels in the week ended July 10 as refineries stepped up production.

The data also showed that distillate inventories, including gasoline and diesel fuel, which had increased for months, rose less than expected.

Oil producers’ cartel OPEC had on Tuesday forecast that demand for crude would rise in 2010 after two years of contraction.

Growth was expected to come mostly from developing economies such as China, India, Latin America and the Middle East.

One year ago, oil prices had struck record peaks above 147 dollars — but they have since collapsed in line with slumping energy demand.

China, the world’s second-biggest energy consuming nation, said on Thursday that its economy grew 7.9 percent in the second quarter of 2009, in a stunning turnaround for the Asian powerhouse that offered some hope for the rest of the world.

This put China back on track to achieve its goal of 8.0 percent growth for the year, despite the financial crisis hitting its crucial export sector particularly hard.

On July 11, 2008, New York crude had rocketed to a record high point of 147.27 dollars and London Brent struck a historic peak of 147.50 on heightened concerns about supplies.

But over the past 12 months, prices have nosedived, striking 32 dollars in December before clawing back some ground on economic recovery hopes.