Oil prices fell further on Tuesday as the market continued to follow concerns over the demand outlook.New York’s main contract, light sweet crude for delivery in May, dropped 83 cents to USD 106.29 a barrel.
Brent North Sea crude for June shed USD 1.46 to USD 120.15 in London afternoon trade.Prices slumped Monday after ratings agency Standard & Poor’s cut its US debt outlook to “negative” and as key industry bodies expressed concern about the impact of high energy costs on demand.
“The downbeat outlook has caused a selling out” of oil, said Victor Shum, an analyst at Purvin and Gertz energy consultancy.But concerns over the unrest sweeping the Arab world and its impact on oil supplies in the crude-producing region are expected to keep prices high, he added.
“Given the geopolitical risks involving oil, I don’t expect a sharp correction in prices,” he said.
“The supply disruption in Libya is real as are the threats of further uprisings in the other parts of oil-producing Middle East and North Africa.”