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LONDON (AFP) - Oil prices pulled lower Thursday on falling demand for crude in the United States, the world's biggest consumer of energy, amid a global economic slowdown, traders said.
New York's main contract, light sweet crude for November delivery, dropped 19 cents to 105.54 dollars a barrel. Brent North Sea crude for November delivery also shed 19 cents to 102.26 dollars a barrel. The market trimmed earlier losses on Thursday as market participants monitored the progress of a huge US rescue plan for the battered financial sector. The White House praised "significant progress" in difficult talks with lawmakers on an emergency economic rescue package and held out hope for a breakthrough deal on Thursday. "We're reaching a consensus and we're going to try to drive that to a conclusion today," spokeswoman Dana Perino told reporters hours before unprecedented crisis talks at the White House. The comments came as US President George W. Bush prepared to host White House rivals Barack Obama and John McCain as well as leading lawmakers from the Senate and House of Representatives at 4 pm (2000 GMT). Sucden analyst Michael Davies added: "Oil was lower with markets still under pressure from concerns about lower demand growth, especially while the US government's bailout plan remains uncertain." Crude prices had ended slightly lower on Wednesday after the US government reported a sharp drop in consumption, stoking worries about energy demand. Americans on average consumed 19.5 million barrels of oil a day over the past four weeks, down 5.3 percent from the same period a year ago, the Department of Energy said in a report. On Thursday investors worried that stalemate over a US government bailout plan for the ailing financial system would further damage the economy and thus weigh more on oil demand, dealers said. Dealers said investor fears could be stoked if the US Congress failed to approve the proposed 700-billion-dollar plan to buy tainted mortgage-related assets at the root of the global financial crisis. President George W. Bush on Wednesday warned the "entire US economy is in danger" and tried to pressure lawmakers who have shown opposition to what is in effect a taxpayer bailout. "Without immediate action by Congress, America could slip into a financial panic," Bush said in a rare live televised speech to the nation. "Ultimately, our country could experience a long and painful recession." Congressional approval of the plan would at least bring some calm to the market, said Tony Nunan, a Tokyo-based manager with Mitsubishi Corp's international petroleum business. "It will at least stabilise prices... If we can stabilise the economy, the market may, and I think will, refocus on the supply-side problem," he said. Oil prices have been volatile recently. On Monday the benchmark New York contract made its biggest one-day leap ever, soaring 16.37 dollars a barrel to 120.92 before falling again. "We still have supply-side problems," Nunan said, referring to low oil reserves in the United States. The US Department of Energy's weekly report showed crude oil stocks fell by 1.5 million barrels in the week to September 19. US gasoline reserves fell for the ninth consecutive week, by 5.9 million barrels, while distillates -- diesel fuel and heating oil -- dropped by 4.2 million barrels. Bart Melek of BMO Capital Markets said: "It's essentially a demand story." Although the inventory numbers were "fairly bullish," he said, "the market is worried about demand longer term." Oil prices have fallen heavily from record levels above 147 dollars in early July on worries the global economy is slowing and causing a dent in energy demand. |