Oil prices slipped on Wednesday after finishing at a record close in the previous session on worries about tight supplies.
Light, sweet crude for October delivery fell six cents to $78,17 a barrel in Asian electronic trading on the New York Mercantile Exchange by late afternoon in Singapore.
The contract on Tuesday rose by 74 cents to settle at $78,23 a barrel — two cents higher than the previous closing record, set July 31.
The record posting came after an announced increase in output on Tuesday by the Organisation of the Petroleum Exporting Countries (Opec) failed to calm market concerns about the ability of producers to meet strong northern winter demand in the final quarter of the year, analysts said.
The supply and demand balance, though, was a little muddied when the Paris-based International Energy Agency on Wednesday lowered its world oil-demand growth forecast for this year to 1,7% from 1,8% a month ago, and for next year to 2,4% from 2,5% in its monthly oil-market report.
The energy watchdog cited a mix of downward economic revisions, high energy prices and mild weather for cutting its growth outlook for this year by 100 000 barrels a day to 85,9-million barrels a day, and for next year by 70 000 barrels a day to 88-million barrels a day.
It also said it is still unlikely that oil demand in the United States and key emerging economies will fall dramatically following the subprime crisis that has roiled global financial markets in recent weeks.
The short-term weaker demand picture also saw the agency cut its implied need for oil from Opec in the coming two quarters by 300 000 barrels a day, to 32,8-million barrels a day and 32,1-million barrels a day, respectively.
Opec, which produces about 40% of the world’s oil, announced its decision to boost output by 500 000 barrels a day starting on November 1 at a meeting on Tuesday. Investors had already priced in Opec’s increase, and many were looking for a larger production boost, analysts said.
”Half a million barrels a day is not nothing; the question on the market’s mind is, ‘Is it enough?”’ said Tobin Gorey, a commodities strategist with the Commonwealth Bank of Australia in Sydney.
”There’s a view that final-quarter demand will be quite strong,” Gorey said. ”In the end it’s going to come down to how cold the northern winter is.”
Traders were also eyeing the release later on Wednesday of US government data on petroleum inventories. Analysts surveyed by Dow Jones Newswires, on average, expect the report from the US Energy Department’s Energy Information Administration to say crude oil inventories fell by 2,7-million barrels in the week ended September 7.
Petrol inventories likely fell by 500 000 barrels last week, while refinery utilisation fell by 0,1 percentage points to 92% of capacity, the survey showed. Inventories of distillates, which include heating oil and diesel fuel, rose by 1,4-million barrels, the analysts predicted, on average.
October Brent crude was flat at $76,38 a barrel on the ICE futures in London. — Sapa-AP