Oil: Insignificant Decline On Shrinking Fuel Demand Due To High Prices

Crude oil was little changed after falling more than $2 a barrel yesterday as a report showed U.S. fuel demand fell to its lowest level since January 2007 as record prices limited purchases.

Fuel demand averaged 20.2 million barrels a day in the past four weeks, down 2.3 percent from a year earlier, the Energy Department said yesterday in a report. Consumption has slipped 5 percent this year from its peak of 21.3 million barrels a day on Jan. 4, data from the Energy Department shows. Retail gasoline prices have climbed 31 percent over that same period.

Crude oil for August delivery was at $134.47 a barrel, down 8 cents, at 10:21 a.m. Singapore time in after-hours electronic trade on the New York Mercantile Exchange. Yesterday, futures dropped $2.45, or 1.8 percent, to settle at $134.55 a barrel. Oil touched a record $139.89 on June 16.

Gasoline consumption has averaged 9.28 million barrels a day for the past four weeks, down 2.1 percent from last year, the department said yesterday. Motor fuel purchases fell 2.7 percent last week, the ninth consecutive decline, MasterCard Inc. said in a June 25 report.

Gasoline for July delivery rose 0.59 cent to $3.40 a gallon in New York. Yesterday, it fell 6.94 cents, or 2 percent, to settle at $3.3941 a gallon. Futures reached a record $3.5762 a gallon on June 16.

Brent crude oil for August settlement was at $134.12 a barrel, down 21 cents, on London's ICE Futures Europe exchange at 10:19 a.m. Singapore time. It fell $2.13, or 1.6 percent, to settle at $134.33 a barrel yesterday. Prices climbed to a record $139.32 on June 16.

A strike by Nigerian white-collar oil workers against Chevron Corp.'s local unit entered a third day, a union official said. Production remained unaffected.

The union and management will hold talks with Petroleum Minister H. Odein Ajumogobia tomorrow and with Abubakar Yar'Adua, head of the state-owned oil company, on June 27.

The strike will continue through the talks ``as long as we are not getting what we want,'' Jonathan Omare, secretary of the Chevron branch of the Petroleum and Natural Gas Senior Staff Association of Nigeria, or Pengassan, said by telephone.