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Oil prices dip below $72 amid demand concerns

Oil prices dip below $72 amid demand concerns

Oil prices slipped below $72 a barrel Wednesday, after tumbling more than 3 percent overnight, as investors expected inventory data from the U.S. to show demand remaining weak in the world's largest economy.
Benchmark crude for October delivery was down 73 cents at $71.32 a barrel by midday European time in electronic trading on the New York Mercantile Exchange.
Prices briefly touched $75 per barrel Tuesday for the first time in 10 months, buoyed by new signals of rising U.S. consumer confidence, but fell back to settle at $72.05 after on measure of inventories showed energy demand was weak in the U.S.
A report by the American Petroleum Institute showed a substantial gain of 4.3 million barrels in crude oil inventories for the week ended Aug. 21.
The official government inventory data is due later in the day from the U.S. Energy Department. For the previous week, crude stocks officially fell 8.4 million barrels.
The buildup in stockpiles was then largely due to the delivery of delayed crude oil imports, and this may further increase due to seasonally lower demand for gasoline as the summer holidays end, said Victor Shum, an energy analyst with consultancy Purvin & Gertz in Singapore.
"The momentum in the oil rally has certainly been broken. We are seeing a well-deserved correction right now and could see oil prices fall below $70 a barrel in the coming weeks," Shum said.
Energy prices have risen sharply this year, riding a rally in equity markets mostly on the cautious expectation that the global economy is improving and demand will rebound soon.
Stock markets were mixed on Wednesday, however _ with markets in Europe and the U.S. down despite Asian gains _ as investors seemed to have already priced in a short-term economic recovery.
In other Nymex trading, gasoline for September delivery fell 0.42 cents to $2.0028 a gallon and heating oil dropped 1.58 cents to $1.8401 a gallon. Natural gas edged down by 5.1 cents to $2.831 per 1,000 cubic feet.
In London, Brent crude fell 42 cents to $71.40.
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Associated Press Write Eileen Ng in Kuala Lumpur contributed to this report.


Updated : 2021-05-09 04:30 GMT+08:00