Oil falls on fading US stimulus hopes

Oil prices fell as hopes dimmed for stimulus measures to re-energise faltering US economy

I / Singapore June 08, 2012, 8:52 IST

Oil prices fell in Asian trade today as hopes dimmed for stimulus measures to re-energise the faltering US economy, analysts said.

New York's main contract, light sweet crude for delivery in July, was down $2.04 to $82.78 a barrel and Brent North Sea crude for July delivery shed $1.48 to $98.45 in morning trade.

"Oil prices have fallen along with equity markets after (US) Federal Reserve chairman Ben Bernanke tempered hopes that there would be more stimulus for the US economy," said Victor Shum, senior principal at Purvin and Gertz international energy consultants in Singapore.

Bernanke's failure to signal any new stimulus on the way for the world's biggest economy, in remarks yesterday to a Congressional panel, dragged on equity and oil markets. The United States is the world's top oil consumer.

Worries are also mounting over Chinese demand after Beijing announced a cut in interest rates yesterday to boost the world's second largest economy and biggest energy consumer.

The interest rate cut by China is also weighing on the market. It is being seen as a sign that the May economic data that will be released soon are quite weak," he added.

Monetary easing had been expected in China following dismal economic figures in April and weak manufacturing numbers in May.