World Business
Bearish demand pressures oil prices
(Xinhua)
Updated: 2010-05-13 09:45
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NEW YORK: Oil prices continued to retreat on Wednesday as another week of fuel inventory buildup weighed on the energy commodities.
Light, sweet crude for June delivery fell 72 cents to settle at $75.65 a barrel on the New York Mercantile Exchange.
Crude futures dropped to as low as $74.91 a barrel during trading. The June contract is $4.5 cheaper than the July contract, the widest divergence between front month contracts since February 13, 2009. The spread between the June and December contracts is $10.17, which usually encourages buyers to store barrels.
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The US Energy Department Energy Information Administration reported on Wednesday that during the week ended on May 7, crude stockpiles rose by 1.95 million barrels to 362.5 million barrels, the highest level since the week ended on May 29, 2009.
Stockpiles of crude oil were forecast to climb by 1.6 million barrels, according to the median of 17 analyst responses in a Bloomberg News survey.
US commercial crude inventory has risen in 14 out of the past 15 weeks. And last week's gain has put current supply 6.1 percent higher than the five-year average for the period.
The International Energy Agency on Wednesday lowered its estimate of world oil demand this year by 220,000 barrels to 86.4 million barrels a day in its latest monthly report, which added to investors' concerns about a weak oil demand.
Moreover, uncertainties about the long-term economic recovery in European countries continued to push the euro lower. A strengthening greenback usually curbs investors' appetite for riskier assets like energy commodities.
