Oil prices continued to lose ground today as traders fretted over a surprise surge in US gasoline stocks and the chance that an economic slowdown was starting to eat into demand for petroleum.
At 10 p.m. (Irish time), North Sea benchmark Brent Blend light, sweet crude retreated more than 20 cents to $26.43 a barrel after a 23-cent slide a day earlier in London.
Not even yesterday's interest rate cut by the Federal Reserve to revive the sluggish US economy could counter bearish sentiment sparked by data showing a steep and unexpected jump in gasoline inventories.
Figures from the American Petroleum Institute industry group and the Energy Information Administration - the statistical arm of the US Department of Energy - recorded huge builds in motor fuel stocks in the week to January 26th.
The API posted a rise of 6.6 million barrels while the EIA pegged gains at a slightly more modest 5.2 million barrels.
The gasoline data added to an already bearish tone as fears of shortages of key heating oil faded recently amid relatively mild winter temperatures in January.
Some European refiners have begun easing production because of poor profit margins.
The waning of the world's biggest economy and the global impact on suppliers of US industrial imports have also raised concerns over growth in oil demand.
The International Energy Agency early in January cut its world demand forecast for this year by 280,000 barrels per day - to 77.3 million barrels per day.
In mid-January, the Organisation of Petroleum Exporting Countries chose to cut global supplies by 1.5 million barrels per day from February 1st on expectations of a second-quarter fall in demand.
That decision has so far kept crude in a $22-$28 target range preferred by OPEC but cartel officials have said the group will do more to defend prices if they should fall below the band as winter consumption dwindles.
Reuters