/ 29 April 2011

Oil near $112 amid slowing US economic growth

Oil prices fell to near $112 a barrel on Friday in Asia as slowing United States (US) economic growth blunted crude’s 33% gain over the past two months.

Benchmark crude for June delivery was down 37c at $112,49 a barrel at midday Singapore time in electronic trading on the New York Mercantile Exchange.

The contract added 10c to settle at $112,86 on Thursday and reached $113,97 during in the session, the highest since September 2008.

In London, Brent crude for June delivery was down 39c to $124,63 a barrel on the ICE Futures exchange.

Investors have been looking for signs that this year’s surge in energy costs and a slowing US economy will start to undermine consumer demand. US gross domestic product grew an annualised 1,8% in the first quarter, down from 3,1% growth in the fourth quarter.

But so far, it appears US petrol demand remains strong. The energy department’s energy information administration said on Wednesday that petrol supplies fell last week for a third consecutive week.

Meanwhile, witnesses and human rights groups said on Thursday that Syrian army units have clashed with each other during a crack down on anti-government protesters.

More than 450 people have been killed across Syria and hundreds detained since the popular revolt against President Bashar Assad began in mid-March.

“Syria only produces 400 000 barrels of crude oil a day, 0,5% of the world total,” Capital Economics said in a report. “However, a prolonged and violent political crisis in Syria will affect investment and tourism in the region overall, and add upward pressure on oil prices.”

In other Nymex trading in May contracts, heating oil fell 0,4c to $3,23 a gallon and petrol added 0,5c to $3,43 a gallon. Natural gas futures were down 0,5c at $4,57 per 30 cubic metres. — Sapa-AP