Oil retreats as demand concern lingers

• Source: xinhua
• [09:25 May 12 2009]
• Comments

Oil prices fell on Monday as investors grew more cautious about crude future's 10 percent jump last week and concerns about slumping demand weighed in.

Light, sweet crude for June delivery fell 13 cents to settle at 58.50 US dollars a barrel on the New York Mercantile Exchange. Futures closed at 58.63 dollars a barrel on Friday, the highest settlement since Nov. 11, 2008.

Oil has been closely following the performance of the equity market and largely ignored the continuous buildup in the crude inventories. Crude oil gained more than 10 percent last week and current price is about 80 percent higher than the 32.40 dollars per barrel reached last December.

US stocks moved lower on Monday with Dow losing 1.82 percent and S&P shedding 2.15 percent. Oil market investors began to take the reality check about the fundamentals. US crude stockpiles rose to 375.3 million barrels during the week ended May 1, according to the US Energy Department. Analysts expected another1 million barrels increase last week.

In London, Brent crude for June delivery fell 66 cents to settle at 57.48 dollars a barrel on the ICE Futures Exchange.