Oil price falls back below $66, fuel demand may stall

Crude oil prices slipped back below $66 a barrel as declines in Asian equities raised concern a recovery in fuel demand may stall. Oil prices fell as Asian stocks traded lower on disappointing US macroeconomic data and as the yen climbed to an eight-month high. Prices earlier rose after Iran, the world’s fourth-largest oil producer, conducted missile tests days before meeting with Western officials over a previously secret nuclear facility, raising concern tensions may put supplies at risk.

“Sentiment in the equity market is having some spillover effect on the oil market,” said David Moore, a commodity strategist at Commonwealth Bank of Australia Ltd. in Sydney. “The equity and oil markets are being driven by similar influences related to the macroeconomic outlook.”

Crude oil for November delivery fell as much as 52 cents, or 0.8 percent, to $65.50 a barrel in electronic trading on the New York Mercantile Exchange. It was at $65.89 at 3:05 p.m. in Singapore. Futures have gained 48 percent this year.

The contract tumbled 8.4 percent last week as mixed economic data pulled U.S. equity prices lower and the country’s crude oil and fuel stockpiles increased.

“Everyone still wants to see what happens with the economy,” said Ken Hasegawa, a commodity derivatives sales manager at broker Newedge in Tokyo. “Oil at this level, near $65, is supported.”

Tags:  Asia, demand, oil prices