Oil prices hovered above $72 on Thursday, following a decline in the previous session, as worries about a slowing US economy overshadowed an unexpectedly sharp fuel stockdraw in the world's largest energy consumer. US crude rose 8 cents to $72.23 a barrel in Globes electronic trading.
Oil settled 27 cents lower at $72.15 a barrel on Wednesday. London's Brent crude rose a marginal 6 cents to $71.05 after shedding 81 cents to close at $70.99 a barrel the previous day. US crude oil and gasoline inventories fell sharply last week amid a surprise slump in crude imports and refinery utilisation, according to data from the US Energy Information Administration (EIA) on Wednesday.
Crude oil stocks in the world's top consumer dropped for the fifth consecutive week by 4.1 million barrels in the week to August 3 to 340.4 million barrels. Gasoline inventories declined by 1.7 million barrels, which the EIA said was below the lower end of the average range. "The inventory data was bullish but investor's interests were obviously muted due to nagging worries about the health of the US economy," said Sydney-based David Moore, a commodity analyst at the Commonwealth Bank of Australia.
The fall in crude stocks follows a dramatic 6.5 million-barrel slump in the previous week. Worried about record high oil prices and concerns that oil demand growth could outpace supply later this year, US Energy Secretary Sam Bondman said he plans to speak with Opec ministers ahead of their September 11 meeting and reiterate the Bush administration's message that the producer group needs to pump more oil.
But calls for Opec to boost production are likely to face resistance from the producer group. Venezuela's oil minister said on Wednesday the global oil market was well supplied and there was no reason for Opec to increase production despite a recent surge in prices.
"There is enough oil in the market," Rafael Ramirez told Reuters on Wednesday while visiting Uruguay. Ramirez's comments echoed recent statements by other Opec ministers, who have said the group, will not increase production at its next meeting on September 11.
Worries about a possible slowing in the US economy, the debt market squeeze and falling stock prices have sent US oil prices tumbling from a record high of $78.77 a barrel struck last on Wednesday. Despite the near 8 percent dive, analysts said the market could still be pulled down by speculative funds moving out of energy and other commodity markets to cover losses in equities and other markets.