February 2010
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Page added on February 1, 2010

Oil prices trading steady around $73 amid worries over demand

Oil prices were little changed on Monday with oil trading close to six week lows amid concerns about global growth and weaker global crude oil demand.

Fresh economic data out of China, the world’s second-largest energy consumer, heightened concerns that Beijing would further tighten monetary policy. An official purchasing managers index remained firmly in expansionary territory, while a companion poll by HSBC scaled an all-time high, with both reports showing evidence of a further increase in cost pressures.

US crude oil futures for March delivery slid 4 cents to $72.85 a barrel by 0818 GMT (3:18 a.m. EST). Oil prices touched $72.43 on January 29, the lowest intraday price since December 21st, while London Brent crude oil futures fell 2 cents to $71.44.

Prices rose briefly following a fire at a crude oil storage tank in Kuwait. State run Kuwait Oil Co was fighting the fire and there was no impact on production, state news agency KUNA said. Oil prices ended January down more than 8 percent, pressured by data showing tepid energy demand in the United States, worries about fiscal turmoil in smaller euro zone countries and a stronger US dollar.

“Looking at how crude oil prices have collapsed in the last 1 to 2 hours of trading in the past few sessions, I think it shows a trend whereby investors are trying to get out of their long positions.”

Money managers cut their net long crude oil futures position on the New York Mercantile Exchange in the week through January 26, the CFTC said on Friday.