Oil Continue Slipping Down Due To Demand Concerns

Oil edged down on Thursday, adding to the past two sessions' $5 losses, as India and Malaysia's decisions to raise fuel costs, together with weaker U.S. consumption, heightened worries about falling oil demand.

U.S. light crude for July delivery fell 38 cents to $121.92 a barrel, having settled down $2.01 on Wednesday at $122.30, its lowest settlement in almost a month.

London Brent crude fell 45 cents to $121.65. "Weaker demand is the main concern now," said Tetsu Emori, fund manager at Astmax Co Ltd in Tokyo. "With domestic prices in these emerging countries now quite high, people will cut their consumption and that is a worry for the market."

India and Malaysia raised retail fuel prices on Wednesday, joining a growing number of Asian nations no longer able to afford big subsidies in the face of record-breaking oil prices.

India raised retail petrol and diesel fuel prices by about 10 percent and Malaysia hiked petrol prices by 41 percent.

U.S. weekly data added to the bearish sentiment as larger-than-expected builds in products stocks, and falling gasoline demand, trumped a surprisingly big drawdown in crude oil stocks.

The U.S. Energy Information Administration reported gasoline inventories rose 2.9 million barrels last week -- despite the start of the summer driving season -- while gasoline demand over the past four weeks slumped 1.4 percent versus last year.