Oil prices languished near $35 a barrel Friday in Asia as traders eyed a weakening U.S. economy and falling global demand that’s sent crude down a third since last week.
Light, sweet crude for February delivery was down 2 cents at $35.38 a barrel by midday in Singapore in electronic trading on the New York Mercantile Exchange. The contract fell $1.88 overnight to settle at $35.40, after trading as low as $33.20, a five-year low.
Concerns center on the U.S., the world’s largest consumer of oil, where falling consumer demand and rising unemployment feed each other and undermine demand for crude. Oil demand fell last year and is expected to drop again this year.
The Organization of Petroleum Exporting Countries (OPEC) lowered its energy demand forecast for 2009, saying in its January report that it expects world demand for crude will fall 180,000 barrels per day in 2009 from the previous year.
OPEC has announced 4.2 million barrels a day of production cuts since September, moves that investors have so far ignored. But investors may be anticipating those output cuts will start to tighten oil supplies later in the year.