Oil Eases Near $93 on U.S. Economic Worries

Oil eased near $93 a barrel on Friday, extending losses for the third consecutive day, on fears that a possible U.S. recession would weaken fuel demand from the world's largest energy consumer.
TradingEconomics.com, Bloomberg 1/11/2008 6:53:46 AM

U.S. crude fell 40 cents to $93.31 a barrel by 9:08 a.m. EST, adding to Thursday's $1.96 decline. London Brent crude traded 62 cents lower at $91.60 a barrel.

Former U.S. Treasury Secretary Lawrence Summers said on Thursday the chance of a U.S. recession was more than 50 percent.

U.S. Federal Reserve Chairman Ben Bernanke said on Thursday the central bank was ready to take substantial measures to shore up the economy, raising expectations for a half-point interest rate cut at the Fed's January 29-30 meeting.

Bernanke's comments helped ease a growing sense of gloom about the U.S. economy. A recession would hit demand from the world's top oil consumer.

Another Fed rate cut could fuel selling of the already weak U.S. dollar, potentially boosting crude and other dollar-denominated assets, which would become relatively cheap.

Oil has been trading above $90 for a month and hit a record high of $100.09 a barrel on January 3.

Oil began its slide on Wednesday after weekly data showed a surprising rise in U.S. fuel stocks and a further steep decline in crude supplies.

In Nigeria, police and security sources said an oil tanker burst into flames at Port Harcourt on Friday after two loud explosions were heard.

The tanker was most likely discharging refined fuel at the city's main port when it burst into flames, oil industry sources said, adding that supplies of crude oil from the world's eighth largest exporter were not affected.