Oil slips on demand concerns, eurozone jitters

Afp May 12, 2010

SINGAPORE: Oil prices were lower in Asian trade on Wednesday as sentiment was dampened by indications of weak US energy demand and doubts remained over a massive eurozone bailout plan, analysts said.

New York's main contract, light sweet crude for June delivery, fell 42 cents to 75.95 dollars a barrel while Brent North Sea crude for June slid 17 cents to 80.32 dollars a barrel.

The New York contract for June was pressured by a weekly industry report from the American Petroleum Institute on Tuesday that said stockpiles of crude at Cushing in Oklahoma, where the contract is delivered, was at a record high.

"The (June contract) which will expire next Monday, is especially weak because of high inventories in the Cushing area," Ken Hasegawa, an energy desk manager of the Newedge Japan brokerage, told AFP. He said prices of other New York crude contracts as well as that of Brent will remain "steady but because of a fear of the European crisis, the upperside will be limited".

In the short term, however, oil prices would be supported at 75 dollars a barrel, Hasegawa added. Stockpiles of crude in the US are closely watched because it is the world's biggest economy and the largest energy consuming nation.

A weekly government oil inventory report by the US Department of Energy will follow late Wednesday.