Global Times - Oil drops below $70 on demand worries

Oil drops below $70 on demand worries

Source: Xinhua
[08:34 August 12 2009]
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Oil prices fell below $70 a barrel on Tuesday as the US government lowered its forecast for the 2009 global oil demand.

According to the US Energy Department's Energy Information Administration (EIA), global oil consumption would fall by 1.71 million barrels per day this year, larger than its previous estimates of 1.56-million-barrel daily drop.

Oil prices have been more than doubled this year on speculation that a global economic recovery will trigger a rebound in demand. However, the updated forecast again reminded that demand recovery might take more time, spurring fundamental worries in the market.

Investors now were waiting for the government inventory data due to be released on Wednesday, hoping to get more clue on the demand side.

Light, sweet crude for September delivery dropped $1.15, or 1.6 percent, to settle at $69.45 a barrel. London Brent for September delivery fell $1.04 to settle at $72.46 a barrel on the ICE Futures exchange.