Oil slipped further on Friday as high fuel costs pushed US inflation to its biggest rise in more than 25 years and energy demand continued to slow in the world's biggest consumer.
Europe's monetary affairs commissioner said high fuel costs had cut the bloc's economic growth and Saudi Arabia's new king expressed his concern about red hot prices that were causing "tremendous damage" to some countries.
Economists have been trying to fathom how much record high oil prices will crimp demand among the world's big consumers and the market is sensitive to each new set of economic data.
News from the United States that consumer prices shot up an unexpectedly large 1.2 percent last month on high energy costs sent US crude down 45 cents to $62.63 a barrel on the New York Mercantile Exchange.
London Brent crude fell 79 cents to $59.35 on the International Petroleum Exchange.
These figures, and Thursday's data showing weakening US fuel demand, overshadowed forecasts for a rebound in consumption next year and doubts the world's oil refiners would be able to churn out enough fuel.
Six US plants are still shut after hurricanes lashed the Gulf Coast and US crude output is at its lowest level since the second World War.
"Meeting such anaemic demand looks like a manageable task," analysts at SG Commodities in Paris said.
The cost of US crude has fallen a long way from its record of $70.85 hit in late August, after Hurricane Katrina plowed into US oil facilities. But prices are still at levels unseen in real terms in a quarter of a century.
European Monetary Affairs Commissioner Joaquin Almunia said high fuel costs had cut euro zone growth by 0.3 to 0.4 percentage point, but he added there were signs of economic recovery.
"So far ... we are not seeing a transmission of the impact of higher oil prices to all prices and costs, so an inflationary process is being avoided," he told Reuters in Salamanca, Spain.
Saudi Arabia's King Abdullah, in his first interview since coming to power, said the world's biggest oil exporter was working to trim prices.
"Without a doubt, we have benefited financially but we believe that the damage to other countries is tremendous and we don't believe prices should be at this level," the king said, according to excerpts of a US television interview to air Friday.
The United States is key to the world's delicate supply-demand balance at the moment, and analysts are dissecting each set of US stock and consumption data.
Figures released on Thursday showed US gasoline demand was down 2.4 percent in the past four weeks, compared with the same period last year. Consumption of distillates, including winter heating oil, dropped 4 percent.
Fuel stocks fell, a consequence of storms that have caused massive disruption to refinery production.
"While stocks once again saw significant draws, the market's focus is currently set on seemingly weaker demand," Citigroup analyst Doug Leggate said in a report.
Not all analysts were convinced by the demand figures. Barclays Capital said demand was calculated using export estimates that could prove to be overstated.
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