Oil fell below $66 a barrel today as a weak demand outlook was expected to be reinforced by weekly inventory data from the United States.
US crude futures fell $1.01 to $65.83 a barrel by 1.05pm after rising 82 cents yesterday. North Sea Brent crude futures fell 65 cents to $64.89.
After last week's drop of about $8 on concerns over high oil inventories and weak demand, prices have remained at the bottom end of a $65-$75 trading range in place since around July.
European shares dipped, with the FTSEurofirst 300 index of top European shares marginally lower.
The dollar rose against the yen, extending gains after US data showed a rise in home prices in July.
The top executive of Saudi Aramco, the state-run oil firm of Saudi Arabia, said yesterday he did not expect to see a swift rebound in global oil demand.
"Oil demand in the United States and Europe remains weak but the economic crisis will not lead to a permanent reduction in global consumption," Khalid Al-Falih, the head of Saudi Arabia's state oil firm, told a US television station. Oil market attention will shift to two sets of US weekly oil statistics later today and tomorrow.
Many analysts expect increases in crude and fuel inventories in the United States, the world's top energy consumer, due to weak demand.
A Reuters poll showed that US crude inventories rose 500,000 barrels in the week to September 25th.
Reuters