Oil prices falling with lower demand
VIENNA, Austria — Crude prices fell again today on more evidence that the global economy is under strain and that demand for energy will fall further.
Light, sweet crude for February delivery fell $1.11 cents to $41.52 a barrel on the New York Mercantile Exchange.
On Wednesday, the contract tumbled 12 percent, or $5.95, to settle at $42.63 after the U.S. Department of Energy's Energy Information Administration said inventories of commercial crude oil inventories rose 6.7 million barrels. That was well above the 1.5 million-barrel build expected by analysts surveyed by Platts, the energy information arm of McGraw-Hill Cos., suggesting demand continues to erode.
The "huge builds in both the crude and products markets for last week" was the main downward price driver, said trader and analyst Stephen Schork, in his Schork Report. And Toby Hassall, an analyst with investment firm Commodity Warrants Australia in Sydney, said the stock build reminded the market that demand remains weak.
"Any price rallies are likely to be short-lived in the near term," Hassall said.
The global economy continues to weaken and today president-elect Barack Obama said the recession could "linger for years" unless Congress pumps unprecedented sums from Washington into the economy.
"I don't believe it's too late to change course, but it will be if we don't take dramatic action as soon as possible," Obama said in a speech set to be delivered at George Mason University in Fairfax, Va., outside Washington. Excerpts from his prepared text were released in advance by his transition team.
