OIL prices extended their slide yesterday on a growing sentiment that the United States might be headed for a recession that would depress demand for oil.
Energy investors remained focused on recent government jobs reports that suggest the economy is struggling to make headway against the challenges posed by a troubled housing market and high oil prices.
"We're still seeing some of these economic concerns," said Jim Ritterbusch, president of Ritterbusch and Associates in Galena, Illinois.
Light, sweet crude for February delivery fell US$1.02 to settle at US$92.69 a barrel on the New York Mercantile Exchange. Prices fell US$1.96 a barrel on Thursday after several big retail chains said holiday sales in the United States were weaker than expected, raising new worries about consumer spending. Crude prices ended the week US$5.22 a barrel lower, and are 7.4 percent below their record trading price of US$100.09 set last week.
The depth of the negative economic sentiment was reflected in the market's tepid reaction Friday to a Nigerian rebel group's bombing of a docked oil tanker. While prices rose on word of the attack and a subsequent fire, economic concerns quickly reasserted their hold on traders. Nigeria is Africa's largest oil producer and a major US supplier.
Oil prices also failed to rally Thursday after Federal Reserve Chairman Ben Bernanke said the central bank is ready to cut interest rates to help stave off a recession.
"If anything, the market's failure to rally on events like the tanker attack, or the prospect of future interest rate cuts to forestall an economic downturn, helps underscore the extent to which the market has turned bearish," said Tim Evans, an analyst at Citigroup Inc., in a research note.
Other energy futures also fell Friday. February heating oil futures fell 2.14 cents to settle at US$2.5359 a gallon on the Nymex while February gasoline fell 3.98 cents to settle at $2.3203 a gallon. February natural gas futures fell 4.9 cents to settle at US$8.21 per 1,000 cubic feet.
In London, Brent crude futures fell US$1.15 to settle at US$91.07 a barrel on the ICE Futures exchange.