WASHINGTON (AP):
OIL PRICES fell more than three per cent Monday, dipping below US$70 a barrel amid concerns about weakening demand and rising inflation. Some analysts said the selloff was triggered by profit-taking.
"This is demand destruction not on a consumer level. It's demand destruction on a trading level," said Michael Guido, Societe Generale's director of commodity strategy. "The reality of it is that the market was in desperate need of a correction. There was not a big change in the world economy."
Still, the International Energy Agency said last week that high prices have pushed oil demand downward, and the Federal Reserve raised concerns about inflation, suggesting interest rates might be pushed higher in order to slow growth.
Saudi Arabia said Monday that the market is well supplied, in part because high prices have trimmed consumption levels.
"There is no lack of capacity right now," Saudi oil minister Ali Naimi told reporters on the sidelines of an energy conference in Amman, Jordan.
Asked about the impact of high prices, Naimi said: "In general, when prices are high, people check their pockets and when they are lower, they open them."
