World oil prices fell on Friday on worries about weak energy demand in the US and about the strength of China’s economy, traders said.
New York’s main contract, light sweet crude for March delivery, sank US$0.98 to US$75.15 a barrel.
Brent North Sea crude for delivery in March dropped US$1.06 to US$73.52 a barrel.
The US Department of Energy (DOE) on Thursday said that gasoline reserves in the world’s biggest economy increased by a stronger-than-expected 3.9 million barrels in the week ending on Jan. 15, striking a two-year high.
It also said refineries operated at 78.4 percent of capacity last week, their lowest rate in at least two decades apart from the immediate aftermath of a hurricane.
“The DOE report was not very bullish [price-supportive]. The refineries’ capacities were down at around 78 percent and that was their lowest in the two decades,” ANZ bank oil analyst Serene Lim said.
However, US crude stocks fell 400,000 barrels, the DOE report said, confounding expectations of a large gain of 1.9 million barrels.
The US is the world’s largest energy consuming country, followed by China.
Meanwhile, moves by China to slow down its roaring economy also weighed on oil prices.
“I think people are very concerned about what the Chinese government would do next to curb the consumption demand growth,” Lim said.
China’s economy expanded 10.7 percent last quarter and by 8.7 percent for the whole of last year.
Oil prices jumped by about 80 percent last year as traders were heartened by evidence that the battered global economy was on the mend, with the eurozone, Japan and the US escaping a fierce recession.
However crude futures have struggled to make much headway early this year as economic data disappoints.
On Tuesday, the OPEC oil producers’ cartel left unchanged its forecast for annual oil demand growth. OPEC said in this month’s report that world oil demand this year was forecast to grow by 0.8 million barrels per day (bpd) to average 85.1 million bpd, representing no major change from last month.
OPEC member the United Arab Emirates on Monday said it was comfortable with current price levels.
UAE Energy Minister Mohammad bin Dhaen al-Hamli said world oil prices were “very reasonable” at the moment.
Asked if he preferred prices to be in excess of US$100 a barrel, he told reporters on the sidelines of a four-day alternative energy forum in the UAE capital: “I don’t like over 100 and don’t like 30.”
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