LONDON, 1 October 2005 — World oil prices fell yesterday ahead of the weekend, as jitters about the slow recovery of US Gulf Coast refineries were tempered by concern that demand may be falling, dealers said.
New York’s main contract, light sweet crude for delivery in November, shed 44 cents to $66.35 per barrel in early trading.
In London, the price of Brent North Sea crude for November delivery lost 95 cents to $62.89 per barrel.
“The crude oil and product markets were torn this week between the staggering loss of prompt product caused by Hurricanes Rita and Katrina, and gnawing worries for demand destruction going forward,” said Deutsche Bank analyst Adam Sieminski.
Richard Savage, head of commodities research at Bank of America, said that while there is ongoing concern about the supply situation, there were also fears about demand falling away.
“The market will become increasingly concerned about the slowdown in demand,” Savage said.
Markets will be looking at next week’s US inventories closely, especially as northern hemisphere winter looms, he said.
“Suppose we get cold winter, we are going to have a big problem. That’s the upward pull on prices, but against that we have concerns that we have reached a price level that’s going to have a real impact on demand,” he added. According to the US Energy Information Administration, about 15 percent of US refining capacity could remain down for the next couple of weeks due to the combined effect of hurricanes Rita and Katrina.