Oil edges lower on demand concerns

30 September 2009

The price of crude oil settled slightly lower on Tuesday as concerns over the future of world oil demand continued to weigh heavy on the market.

Figures released in the US showed that consumer confidence took an unexpected downturn in September, hampered by the record high unemployment rate and uncertain outlook.

Meanwhile, with the country's weekly inventory report due out today (Wednesday), analysts predicted a potential surge in crude supply.

Distillates, including heating oil, are also expected to show a rise in stockpiles, fuelling concerns about the strength of world energy demand and putting added pressure on the energy markets.

US crude for November delivery eventually ended the day at $66.71 (£41.49) a barrel, down 13 cents on the previous day, while London Brent crude fell five cents to settle at $65.49.

Despite the bearish fundamentals facing the market, oil prices have remained relatively stable between $65 and $75 since recovering from lows of $33 earlier this year.

Values bounced back above $67 a barrel in early trading today (Wednesday), as US crude futures rose 45 cents to $67.16 by 06:38 BST. London Brent crude gained 41 cents to reach $65.90.

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