Oil Falls a Second Day

Crude oil fell for a second day in New York on signs that high prices and a slowing economy will curb U.S. fuel consumption.
TradingEconomics.com, Bloomberg 4/11/2008 6:51:35 AM

The four-week average of implied U.S. fuel demand was less than last year for the 10th straight week, the Energy Department reported on April 9. Gasoline use may drop this summer for the first time in 17 years, the agency said. Crude reached a record $112.21 a barrel on April 9.

Crude oil for May delivery fell as much as 62 cents, or 0.6 percent, to $109.49 a barrel in after-hours trading on the New York Mercantile Exchange. It was at $109.92 at 2:59 p.m. Singapore time. Yesterday, futures fell 76 cents, or 0.7 percent, to settle at $110.11 a barrel. Prices are up 77 percent from a year ago.

Crude oil in New York rose to a record $112.21 a barrel on April 9 after an unexpected decline in U.S. oil inventories.

Brent crude for May settlement was at $108.29 a barrel, up 9 cents, on London's ICE Futures Europe exchange at 3 p.m. Singapore time. The contract yesterday declined 0.3 percent to settle at $108.20, after reaching a record $109.98.

Oil prices also fell as the euro declined from a record against the dollar. The dollar's drop has encouraged investors to buy commodities and made oil cheaper for buyers in other currencies.

Federal Reserve officials anticipated the U.S. economy will shrink in the first half of the year and expressed some concern about ``a prolonged and severe economic downturn'' as they cut interest rates last month, according to minutes of the March 18 Federal Open Market Committee meeting, released April 8.

U.S. implied fuel demand averaged 20.5 million barrels a day in the past four weeks, down 0.4 percent from a year earlier, the Energy Department said.

Crude oil may fall next week as imports increase and U.S. refiners operate at below-average rates, bolstering inventories.