Oil falls to USD 38.70 a barrel

Oil fell to USD 38.70 a barrel in Asian trade on Friday in a market plagued by weak demand.

Written by Agencies | Singapore | Published:February 20, 2009 11:14 am

Oil prices fell in Asian trade on Friday in a market plagued by weak demand despite a sharp price rebound the day before,analysts said.

New York’s main futures contract,light sweet crude for delivery in March,fell 78 cents to USD 38.70 a barrel.

The contract was to expire at the close of trade later on Friday.

Brent North Sea crude for April delivery shed 43 cents to USD 41.56.

Analysts said Thursday’s price rebound did not indicate any increase in global energy demand,which has fallen heavily during the worldwide economic slowdown.

“We may in fact be seeing a drawdown in prices… (The rebound) was more a supply-driven event,not a pickup in demand,” said Mark Pervan,senior commodities analyst for ANZ bank,Melbourne.

Pervan said prices rose because of cutbacks in output imposed by the Organisation of Petroleum Exporting Countries (OPEC) rather than increased energy demand.

Yesterday the benchmark New York contract rose by almost USD five and Brent jumped more than USD dollars after US Energy Information Administration (EIA) data showed US crude reserves fell 200,000 barrels in the week ending February 13,after several weeks of significant increases.

A greater-than-expected rise in petrol stockpiles indicated that energy demand was still low,Pervan said.

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