Oil prices fall amid weak US energy demand


Oil prices retreated slightly on Monday as weak energy demand and concerns over more fiscal battles in Washington tempered news of growth in the US jobs market, analysts said. New York’s main contract, light sweet crude for delivery in February shed 11 cents to $92.98 a barrel. Brent North Sea crude for February dropped 30 cents to $111.01 in late London deals. Official data on Friday showed that the US economy generated 155,000 jobs in December, and the unemployment rate held at 7.8 percent. However, a separate US government report last week showing softer fuel demand outweighed that news, Phillip Futures said in a market commentary.
Weaker US energy demand “added to bearish concerns about oil markets, which have been closely monitoring economic data for signals about consumption, which is under pressure because of the struggling economy”, the broker added.
The United States is the world’s biggest oil consuming nation and the health of its economy is a key influence on crude prices. Other analysts said that markets remained concerned over more brinkmanship in the US Congress after last week’s 11th-hour deal that averted the fiscal cliff of tax rises and spending cuts which threatened to tip the economy into recession. While the lawmakers put off the huge tax rises on many wage earners, an agreement on spending cuts was put off until the end of February, when they must also hammer out a deal to raise the country’s borrowing limit. Iran revealed that its oil exports had slumped by 40 percent in the past nine months because of tough Western sanctions.
“There has been a 40 percent decrease in oil sales and a 45 percent decrease in repatriating oil money,” Oil Minister Rostam Qasemi was quoted as saying, in a reversal of his previous denials of any decline at all.
Qasemi made his comments to the Iranian parliament’s budget commission, according to the ISNA news agency citing MPs.
The minister said the final figures for the current Iranian calendar year, which ends in March 2013, would show “a significant decrease” in crude export revenues, but he did not provide any numbers.
The admission by Qasemi was significant, given that he was one of the officials who up to now had been most adamant in claiming that Iran’s crucial oil exports were entirely unaffected by US and EU sanctions. The international sanctions targeting Iran are intended to choke the country’s revenues used for its disputed nuclear programme, and to force it to the negotiating table. Iran insists the programme is for purely peaceful purposes, and denies Western and Israeli allegations that it wants to manufacture nuclear weapons. It is forging on with uranium enrichment and says it will survive the Western pressure.