The uncertainty over oil futures continued on Thursday, with crude prices well down from the record peaks of recent sessions on concerns that high energy prices would weaken economic activity.
Those fears followed higher-than-expected US inflation data and Wal-Mart’s comments that high oil prices were hitting consumer spending.
However, US data on Thursday pointed to stronger economic conditions that would support relatively high oil prices.
IPE Brent for October delivery reversed early gains to fall 16 cents to $62.40 a barrel by the close of London trade.
The slide extended the decline in the previous session, when October Brent fell by $2.52 after the latest weekly US inventories report showed further increases in crude and distillate supplies. The benchmark Brent contract is about 7 per cent below the record $66.85 reached on Monday.
September Nymex WTI eased 25 cents to $63 a barrel before recovering to close up 2 cents at $63.27 on the New York Mercantile Exchange. It had fallen $2.83 on Wednesday after reaching a record $67.10 last Friday.
“The market has only fallen by that magnitude a handful of times, and it does so because of a reason, and that reason is that people are worried about the effect of high oil prices on demand,” said one London-based oil trader.
US gasoline futures had another large fall, with the September Nymex gasoline contract dropping 4.2 cents to $1.8490 a gallon in New York trade, down about 9 per cent from the record high reached on Wednesday.
US natural gas futures also fell heavily after a bigger-than expected-increase in US gas volumes held in storage. Nymex September henry hub natural gas futures dropped 5 per cent to $8.915 per million British thermal units.
Goldman Sachs raised its five-year average US crude price forecast to $60 a barrel from $45 because of uncertainty about investment levels in the oil industry.
It said it also expected the WTI price to average about $67 for the rest of the year and average about $68 next year.
Global nickel consumption rose by only 1 per cent in the first half of 2005, compared with the same period last year despite a strong rise in Chinese use, the International Nickel Study Group said.
The INSG said that although Chinese consumption had risen by more than 30 per cent, global consumption was up by only 1 per cent due to declines elsewhere. About two-thirds of nickel consumption is used in stainless steel production.
The three-month nickel price was $150 lower at $14,900 a tonne on the London Metal Exchange.
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