SINGAPORE (Commodity Online) : World oil prices extended falls in Asian trade Monday mainly on concerns over energy demand following mixed economic reports.
Light sweet crude for April delivery was seen trading at $ 80.78 a barrel at 11.30 a.m Singapore time while Brent crude was at $ 79.62 a barrel at the same time.
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Analysts attributed oil’s decline to speculation on increase in fuel inventories supplied by OPEC, which might outpace recovery in energy demand.
Oil fell after Iran’s OPEC governor Mohammad Ali Khatibi said the market may be oversupplied later this year if the group, meeting March 17, fails to comply with output limits.
OPEC, which pumps 40 percent of the world’s oil, cut production quotas by a record 4.2 million barrels a day at the end of 2008 as demand plunged. The group will likely seek tighter compliance at this week’s meeting in Vienna.
The 12 OPEC members bound by quotas, all except Iraq, produced 26.7 million barrels a day in February, the Paris-based IEA said March 12. Their compliance dropped to 56 percent, from 58 percent in January.
On Friday, oil prices ended the week lower following mixed economic reports that kept investors on edge about the outlook for improving energy demand.
April delivery slid 87 cents to settle at $81.24 a barrel on the New York Mercantile Exchange. Brent crude fell 89 cents to settle at $79.39 on the ICE futures exchange.
The IEA, predicted in its monthly report that oil demand would average 86.6 million barrels a day this year, or 1.6 million barrels a day more than in 2009, up slightly from last month's forecast.
