Burst Bubble?

May 30, 2008 (LBO) – World oil prices held steady in Asian trade on Friday after sharp falls on concerns over falling demand in the United States and other developed countries, analysts said. New York’s main oil futures contract, light sweet crude for July delivery, was 17 cents lower at 126.45 dollars a barrel after losing a hefty 4.41 dollars to close at 126.62 dollars per barrel in trading at the New York Mercantile Exchange on Thursday.

Brent North Sea crude for July delivery was 11 cents lower at 126.78 dollars a barrel following a slide of 4.04 dollars to settle at 126.89 dollars on Thursday in London.

The slide in prices came after both contracts struck historic peaks a week ago. Brent hit 135.14 dollars and New York prices reached 135.09 dollars on tight supply fears.

“I guess the market’s sort of factoring in the growing understanding that demand in the US is just not gonna recover,” said Jason Feer, of energy market analysts Argus Media Ltd in Singapore.

Prices initially jumped higher Thursday after a weekly report on United States energy stockpiles. Values then tumbled as some analysts questioned if energy demand was dropping amid sky-high prices.

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