U.S. oil prices fell Monday on renewed concerns that the OPEC cartel's recent cut in production would not be enough to counter the impact of a global economic slowdown. U.S. light sweet crude for September delivery traded down 1.4 percent, or 23 cents, at $26.96 a barrel. London Brent futures for September delivery traded down 21 cents to $24.98 a barrel.
Oil prices have
declined steadily since late May amid increasing evidence that the global economic slowdown is eating into demand for petroleum this year. Concern over falling prices and a sustained rise in spare petroleum stocks spurred the OPEC producer cartel to agree last week to a 1 million barrels per day (bpd) output cut.
But traders were reluctant to push prices up without indications that the world economy is rebounding.
"If the trend of a build in U.S. crude stocks continues and there are no signs the economy is recovering, that will push prices down in the weeks ahead," said Lawrence Eagles of GNI Research. The U.S. Commerce Department on Friday said gross domestic product, the broadest measure of the nation's economic health, grew at the lowest quarterly rate in eight years, at 0.7 percent in the second quarter.
A meeting over the weekend in Geneva of the oil ministers of Saudi Arabia, Venezuela and Mexico ended with a vow to keep the market adequately supplied and stable following OPEC's supply curb decision.
Traders took this event as neutral for prices. Wholesale August gasoline futures lost 0.64 of a cent Monday to 75.11 cents per gallon, while the national average price for retail gasoline at self-service regular pumps was steady at $1.394 a gallon. August heating oil futures fell 0.72 of a cent to 70.59 cents per gallon.
Rising temperatures in the Midwest and Texas pushed natural gas futures up about five percent, to $3.35 per million British thermal units (BTUs) on Monday. - (Reuters)