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Oil falls on US slowdown worries | Oil falls on US slowdown worries |
(about 13 hours later) | |
Oil prices have continued to slide amid fears that a US recession will weaken global demand for crude and President Bush called for production to be upped. | |
US light crude fell $1.06 to $90.84 a barrel, after sliding $2.30 on Tuesday. London's Brent crude oil dropped $1.23 to $89.75 a barrel. | |
Fears of a recession have increased on several firms missing profit forecasts and data showing weak consumer demand. | |
The International Energy Agency (IEA) said oil prices could fall further. | The International Energy Agency (IEA) said oil prices could fall further. |
In past weeks, the cost of crude has surged to record levels, breaking through the $100-mark for the first time. | In past weeks, the cost of crude has surged to record levels, breaking through the $100-mark for the first time. |
I think there is a disconnect...between price and fundamentals Abdullah al-Badri, Opec Secretary-General | I think there is a disconnect...between price and fundamentals Abdullah al-Badri, Opec Secretary-General |
However, a number of analysts and oil industry experts have said that the increases in price are down to speculative buying and geo-political fears rather than a shortage of crude. | However, a number of analysts and oil industry experts have said that the increases in price are down to speculative buying and geo-political fears rather than a shortage of crude. |
Opec Secretary-General Abdullah al-Badri said on Wednesday that: "I think there is a disconnect...between price and fundamentals. The market is really influenced by other factors." | Opec Secretary-General Abdullah al-Badri said on Wednesday that: "I think there is a disconnect...between price and fundamentals. The market is really influenced by other factors." |
He added that the oil producers group Opec would "not be hesitant to increase production if fundamentals justify that". | He added that the oil producers group Opec would "not be hesitant to increase production if fundamentals justify that". |
The IEA said in its monthly report on Wednesday that demand for crude oil in 2008 will be 87.8m barrel per day, which represents a 2.3% rise from 2007 levels and is slightly lower than previous estimates. | The IEA said in its monthly report on Wednesday that demand for crude oil in 2008 will be 87.8m barrel per day, which represents a 2.3% rise from 2007 levels and is slightly lower than previous estimates. |
It said that rising demand in China, falling oil stocks, and tensions in the oil-rich Middle East and Nigeria remain "important supportive factors" for oil prices. | It said that rising demand in China, falling oil stocks, and tensions in the oil-rich Middle East and Nigeria remain "important supportive factors" for oil prices. |
Opec is due to meet on 1 February to discuss output levels, and there are already some calls for production to be boosted. | Opec is due to meet on 1 February to discuss output levels, and there are already some calls for production to be boosted. |
US President George Bush called on Opec to consider the wider implications of near record oil prices and the impact that they would have on the global economy. | US President George Bush called on Opec to consider the wider implications of near record oil prices and the impact that they would have on the global economy. |
If "one of the biggest consumers' economy suffers it means less purchases, less oil and gas sold," President Bush said. | If "one of the biggest consumers' economy suffers it means less purchases, less oil and gas sold," President Bush said. |
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