Friday April 17, 12:02 PM
Oil prices fall further on weak outlook
LONDON (AFP) - World oil prices drifted down on Friday as the market focus remained on weak energy demand and high US crude stocks in a slowing global economy, traders said.
London's Brent North Sea crude for June delivery shed 11 cents to 52.95 dollars per barrel.
New York's main futures contract, light sweet crude for delivery in May, lost a marginal two cents to 49.96 dollars a barrel.
Oil prices had swung higher on Thursday, in tandem with a Wall Street rally amid growing hopes for a rebound in the struggling American economy.
But the market was dragged lower this week by news that US crude oil stockpiles had reached an 18-year pinnacle, suggesting that demand was tailing off in the world's biggest energy consuming nation.
"Demand is poor and inventories have built to ample or even onerous levels," said analyst Peter Beutel at US-based energy consultancy Cameron Hanover.
The US government's Department of Energy (DoE) said on Wednesday that crude stocks surged 5.6 million barrels in the week ending April 10 to reach 366.7 million barrels, which was the highest level since September 1990.
Analysts polled by Dow Jones Newswires had predicted a smaller weekly gain of 2.1 million barrels. Crude inventories are now 16.5 percent higher than at the same stage last year.
Traders continued to digest Thursday's news that China, the second-biggest energy consumer after the United States, has announced its slowest growth in at least a decade, underlining the grave impact of the global economic crisis.
China posted first-quarter growth at an annual rate of 6.1 percent, down from 6.8 percent in the final three months of 2008.
The market was also knocked this week by oil demand forecast downgrades from the International Energy Agency (IEA) and the Organization of the Petroleum Exporting Countries (OPEC).
Oil prices slid on Monday after the IEA slashed its 2009 global forecast by one million barrels per day (bpd) to 83.4 million bpd, about 2.4 million bpd less than in 2008 and the lowest level since 2004.
The IEA also forecast that the global economy would contract 1.4 percent in 2009 instead of a modest expansion.
In further gloomy news on Wednesday, OPEC cut its estimate for world crude demand again, arguing that a "devastating contraction" in consumption would keep prices under pressure in the months ahead.
OPEC estimated that demand would contract by 1.37 million bpd or 1.6 percent in 2009.
"In the coming months, the market is expected to remain under pressure from uncertainties in the economic outlook, demand deterioration and the substantial overhang in supply," OPEC wrote in its latest monthly report.
"Oil demand is suffering more and more from the world economic recession," it added.
OPEC, which pumps 40 percent of world oil supplies, holds its next production meeting in Vienna on May 28.
The cartel has cut its oil production target by an overall 4.2 million barrels per day since September to 24.84 million bpd as it seeks to defend its members' plunging oil revenues.
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