Oil retreats despite surprise drop in inventories
Crude oil fell on Wednesday as the tumbling equity market and weak demand outweighed the surprise drop in the crude and gasoline inventories.
Light, sweet crude for June delivery dipped 83 cents to settle at 58.02 U.S. dollars a barrel on the New York Mercantile Exchange.
Contract price rose to 59.90 dollars a barrel in early trading after the weekly report from the U.S. Energy Department showed crude supplies fell 4.63 million barrels in the week ended May 8. Analysts had expected an increase of 1 million barrels.
But oil prices pulled back along as the U.S. stock market plunged on a weaker-than-expected retail sale report. Demand concern weighed on the market as investors worried that rising unemployment rate and falling home values would cut further into consumer spending. Current U.S. daily fuel demand averaged 18.2 million barrels in the four weeks ended May 8, the lowest consumption level since May 1999, according to the Energy Department report.
Meanwhile, OPEC lowered again its forecast for world oil demand in 2009. Global oil consumption will contract by 1.57 million barrels a day this year to 84.03 million barrels, according to an OPEC report released Wednesday. That’s 150,000 barrels lower than the April forecast.
In London, Brent crude for June delivery fell 60 cents to 57.34dollars a barrel on the ICE Futures Exchange.