Oil prices slip on economic concerns

Written by Agencies | New York, March 29: | Updated: Mar 29 2008, 18:35pm hrs
World oil prices fell sharply on renewed concern that a slowdown in the US economy would dampen energy demand and on news that damage to an Iraqi pipeline was not as serious as first thought.

New York crude values dropped under USD 106 a barrel, a day after spiking above USD 107 when it was announced that saboteurs had attacked a pipeline in Iraq, which heightened concerns over tight global supplies of energy.

New York's main oil futures contract, light sweet crude for delivery in May, closed down USD 1.96 at USD 105.62 per barrel.

In London, Brent North Sea crude for May delivery settled down USD 1.23 at USD 103.77.

"Oil futures slid as markets once again refocused on US economic concerns as it was suggested that oil flow through the damaged Iraqi pipeline may be almost back to normal," said Sucden analyst Michael Davies yesterday.

"Despite the speedy turnaround, it remains clear that markets will remain nervous that we could see more disruptions in the region following the explosion of fighting in the area," he added.

One of Iraq's two main oil export pipelines near the southern city of Basra was blown up on Thursday amid escalating fighting.

Davies added that oil prices were falling yesterday after negative economic comments from US officials a day earlier "helped to remind the market that energy demand growth could falter in the world's largest consumer."

However losses were limited by a weaker-than-expected energy stockpiles report this week in the United States, the world's biggest energy consumer, traders said.