Oil slips on demand worries

Oil slipped Tuesday in Asian trade as demand concerns continued to cast a shadow on sentiment, analysts said.

New York’s main contract, light sweet crude for June delivery was off 27 cents to $97.10 a barrel and Brent North Sea crude eased 30 cents to $110.54.

The two contracts had closed weaker Monday in US trade.

“Obviously we were down in the US session,” said Ben Westmore, a Melbourne-based commodity economist with National Australia Bank.

“A lot of that has to do with concerns for US demand,” he told AFP.

Crude prices started falling earlier this month on the back of mounting concerns that high price levels could erode energy demand, especially in the United States, the world’s number one oil consumer.

The International Energy Agency (IEA) last week cut its outlook for 2011 global oil demand growth by 190,000 barrels per day (bpd) to 89.2 million bpd because of high oil prices and a weaker recovery in rich countries.

It was the first cut in estimated demand for 2011 since the IEA produced its first forecast in the middle of last year. Until then it had constantly revised its estimates upwards as recovery from the economic crisis deepened.

The downward revision reflected mainly an easing of demand in North America due to high prices, the agency had said.