Oil falls to near US$97 a barrel amid weak US, Europe demand


AP

SINGAPORE–Oil fell to near US$97 a barrel Tuesday in Asia, extending nearly a week of losses as signs of sluggish economic growth in the U.S. and Europe foreshadowed tepid demand for crude. Benchmark oil for June delivery was down 90 cents to US$97.04 a barrel at late afternoon Singapore time in electronic trading on the New York Mercantile Exchange. The contract settled down 55 cents at US$97.94 in New York on Monday after trading as low as US$95.34 per barrel — its cheapest level this year. Brent crude for June delivery was down 78 cents at US$112.38 per barrel in London. In other energy trading, heating oil was steady at US$2.98 per gallon and gasoline futures fell 0.2 cent to US$2.97 per gallon. Natural gas added 0.6 cents at US$2.34 per 1,000 cubic feet.

Crude has dropped from US$106 last week as indicators from major developed economies show they continue to struggle. Last week, the U.S. said factory orders fell in March while the economy added fewer jobs than expected in April. Spain said its economy slipped into recession last quarter as the unemployment rate reached 24 percent. “While it is easy to malign the European recovery, the latest round of U.S. macro-economic data is troubling in itself,” energy trader and consultant The Schork Group said in a report. If the fall in oil prices continues, prices for crude products such as gasoline should also drop, providing a potential boost for consumer spending. “The U.S. economy has shown it’s incapable of maintaining growth levels when energy prices surge, so we expect growth to remain weak in the midterm and the long-term, unless the current sell-off holds,” Schork said.