Oil Slips From $82

Thursday, March 11, 2010 at 3:07 pm under Business News

SINGAPORE: Oil prices fell below $82 a barrel Thursday in Asia as traders eyed tepid U.S. crude demand amid an overall economic expansion.

Benchmark crude for April delivery was down 51 cents to $81.58 a barrel at midday Singapore time in electronic trading on the New York Mercantile Exchange. The contract rose 60 cents to settle at $82.09 on Wednesday.

Crude prices have hovered in the low $80s this week — after jumping from $69 early last month — on investor optimism that sluggish U.S. oil demand will eventually reflect a growing global economy.

U.S. data for last week was mixed. The Energy Information Administration said Wednesday that crude inventories grew while gasoline and distillate supplies fell.

Some analysts are concerned economic growth in developed countries may slow in the second half as massive government stimulus spending peters out, making commodity demand even more dependent on growth in emerging markets such as China and India.

“We have actually become more worried about the outlook for the global economy,” London-based Capital Economics said in a report. “The boost from policy stimulus will soon fade. The recovery looks fragile in the U.K. and may already have stalled in the euro-zone.”

Capital Economics said it expects an oil price of $60 a barrel at the end of this year and the end of 2011.

In other Nymex trading in April contracts, heating oil fell 0.77 cent to $2.1085 a gallon, and gasoline dropped 1.41 cents to $2.271 a gallon. Natural gas was almost unchanged at $4.557 per 1,000 cubic feet.

In London, Brent crude was down 52 cents at $79.96 on the ICE futures exchange.