Oil prices continue fall on demand fears

31 January 2010

Gasoline stocks on the rise in the US

Oil prices continued to fall during the week ended 28 January largely on fears that demand is not rising in the US, the world’s largest consumer.

The US’ March West Texas Intermediate (WTI) contract was trading at $72.60 a barrel on 28 January, down from $77.90 a week before.

Europe’s benchmark March Brent contract was trading at $73.90 a barrel at the same time, down from $78.40 a barrel on 21 January.

The last price available for the average Opec oil contract was $71.87 a barrel on 27 January, down from $75.30 a barrel seven days before.

Prices have fallen steadily since early January when they were trading at more than $80 a barrel. The fall is largely due to ongoing concerns over demand for oil in the coming year, analysts say.

Prices fell on 27 and 28 January on the back of a report from the US Department of Energy. Although stocks of crude oil fell in the country during the week ending 22 January gasoline stocks rose, the report said, suggesting a lack of demand in consumer markets.

Crude oil inventories fell by 3.9 million barrels to 326.7 million barrels while gasoline stocks rose 2 million barrels to 229.4 million barrels. Although crude stocks are down 12.2 million barrels from the same period of 2009 gasoline inventories are up 9.5 million barrels.

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