Oil was down in Asian trade Wednesday due to weaker US energy demand and as traders locked in profits from the previous day’s gains, analysts said.
New York’s main contract, light sweet crude for July delivery, lost 57 cents to $99.02 a barrel, while Brent North Sea crude for the same month dipped 82 cents to $111.71.
“Investors might be taking in profits as it is approaching a long weekend in the US market,” said Ker Chung Yang, commodity analyst for Phillip Futures in Singapore, referring to a public holiday Monday to mark Memorial Day.
Ker said a less than expected fall in US crude inventories, which reflect softer energy demand, helped push prices lower. The US is the world’s biggest oil consuming nation.
Data by the American Petroleum Institute (API) showed that crude inventories last week fell less than what the market had expected.
Analysts said however that oil prices remain on an upward trend, partly due to the continuing turmoil in the crude-producing Middle East and North Africa region.
Goldman Sachs estimated Brent oil would hit $130 a barrel over the next 12 months.
“While near-term downside risk remains as the oil market negotiates the slowdown in the pace of world economic growth, we believe that the market will continue to tighten to critical levels by 2012, pushing oil prices substantially higher to restrain demand,” it said.
Morgan Stanley also raised its 2012 forecast to $130 a barrel, from $105, predicting tight supplies from production loss in Libya, where NATO air strikes are helping rebels in a bid to oust strongman Moamer Kadhafi.