U.S. fuel demand has dropped for seven out of the past eight weeks while a report tomorrow may show manufacturing slumped to a five-year low this month. Fighting between government forces and militiamen in Iraq, holder of the third- largest proven oil reserves, eased after a truce offer from Shiite cleric Moqtada al-Sadr.
U.S.and Europe demand will likely remain weak for the next few months, the combined impact of a weakening economy and high oil price inflation are putting pressure on total U.S and Europe oil demand.
Crude oil for May delivery fell to $104.34 a barrel in electronic trading on the New York Mercantile Exchange. It was at $104.94 at 9:36 a.m. in London.
Brent crude for May settlement fell to $102.86 a barrel on London's ICE Futures Europe exchange. It was at $103.63 at 9:37 a.m. London time.
New York oil futures reached a record $111.80 on March 17 as the slumping U.S. dollar and falling equity prices encouraged investors to seek better returns in commodities. Prices fell as low as $99.13 last week before rebounding amid renewed fighting in southern Iraq.
An Iraqi oil pipeline that carries about 100,000 barrels a day to the Basra oil terminal was damaged by a fire started by an explosive device on March 27.
The pipeline attack came after the Iraq government led by Nuri al-Maliki began raids on the Shiite force led by al-Sadr in Basra, with violence spreading to Baghdad and other cities.
As WorldWatch mentioned before several world economic powers will see demand for crude continue to fall as long as the barril price continues above $85, crude producers, oil companies and speculators will now start to be affected by this curb on the demand for crude as also other forms of energy are developed and used ...