SINGAPORE, August 5, 2008 (AFP) – World oil prices fell in Asian trade Tuesday as fears about slowing US demand outweighed the increasing likelihood of heightened tensions over Iran’s controversial nuclear programme, dealers said. The storm was not seen as a threat to oil installations but operators in the crucial US petroleum industry hub said they were taking safety precautions as the storm neared.
In morning trade, New York’s main contract, light sweet crude for September delivery fell 1.07 dollars to 120.34 dollars a barrel from 121.41 dollars at the close of floor trading in the United States Monday.
London’s Brent North Sea crude for September delivery dropped 77 cents to 119.91 dollars.
Oil prices fell below 120 dollars in New York and London Monday for the first time in three months after latest US economic indicators signalled weakness in the world’s biggest economy, dealers said.
The monthly US Commerce Department survey showed Monday consumer spending, which fuels two-thirds of output, had cooled in June while inflationary pressures accelerated.
The US is the world’s biggest energy user and any signs of slowing consumer spending usually weighs down global oil demand projections.