Oil falls to 112 dollars

Standing left to right – Mr. Dinesh Jebamani (Chief Manager Liability Product Management and New Age Media – Seylan Bank), Mr.Sudesh Peiris (Senior Manager – Digital Banking Channels – Seylan Bank), Ms. S.Senevirathne (Representative of the Revenue Department – Western Province), Mr. Tilan Wijeyesekera (Deputy General Manager – Retail Banking – Seylan Bank) and Mr. Malik Wickremanayaka (Deputy General Manager – Operations – Seylan Bank)

SINGAPORE, August 19, 2008 (AFP) – World oil prices fell further on Tuesday, dragged down by worries that weaker US oil demand could spread to Europe and Japan, analysts said. New York’s main contract, light sweet crude for September delivery, dropped 48 cents to 112.39 dollars a barrel.

That came on top of a 90-cent drop in New York trade Monday, when the price closed at 112.87 dollars at the end of floor trading.

Brent North Sea crude for October delivery fell 58 cents to 111.36 dollars after settling 61 cents lower at 111.94 dollars a barrel on Monday in London.

“There’s a fear in the oil market right now about some of the pretty dramatic news we’ve seen coming out of the United States spreading into Europe and Japan,” said Dave Ernsberger, Asia director of global energy information provider Platts, in Singapore.

Oil demand in the United States has suffered its biggest fall since 1982, Ernsberger said, describing demand in the world’s largest oil consumer as “a basket case.”

Demand has suffered while the US economy struggles.

World oil prices have fallen heavily from record highs above 147 dollars in early July but are still well above levels