Oil down on US worries, BP plunge

SINGAPORE, July 29, 2009 (AFP) - Oil prices lost more momentum in Asian trade Wednesday, pulled down by a drop in US consumer confidence and a fall in earnings by British energy major BP, analysts said.

New York's main contract, light sweet crude for September, eased 60 cents to 66.63 dollars.

London's Brent North Sea crude for September delivery fell 28 cents to 69.60 dollars a barrel.

Crude prices remain under pressure after a Conference Board report Tuesday showed US consumer confidence fell for a second straight month in July on worries about the job market.

The business research firm said its confidence index fell to 46.6 from 49.3 in June, which came after an eight-month peak of 54.8 in May. The July figure was weaker than analyst expectations of 49.0.

"The soft US consumer confidence numbers were a negative for the oil price," said David Moore, a Sydney-based commodity strategist with the Commonwealth Bank of Australia.

London-based Capital Economics analyst Paul Ashworth said the confidence readings reflected the fragility of recovery in the world's biggest economy and number one oil consumer.

"There won't be a meaningful recovery in the US economy until consumers start to spend more freely again," Ashworth said.

BP's 53-percent slump in second-quarter net profit was another drag on crude prices, with chief executive Tony Hayward predicting energy demand would remain sluggish.

"The overall picture is of energy demand now stabilising following significant falls in the first half of the year," Hayward said.

But he added: "We see little evidence of any growth in demand and expect the recovery to be long and drawn out."

BP reported Tuesday net profit in the June quarter tumbled 53 percent to 4.39 billion dollars (3.07 billion euros) while revenues nearly halved to 56.56 billion dollars from 110.98 billion dollars a year ago.

Source: AFP

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