Oil falls another US$ as costs hit economy

LONDON – Oil prices fell more than a dollar a barrel for a second day yesterday on signs that high energy costs are cutting into economic growth.

US light crude lost US$1,03 (N$6,80) to US$52,60 a barrel after a US$1,26 slide on Monday. Prices are down four per cent in two days from Friday’s close of just below US$55 a barrel.Brent crude in London eased 86 cents to US$48,10 a barrel.The reversal from record highs comes on growing evidence that rocketing fuel costs are starting to slow the economic growth that helped ignite this year’s US$20-a-barrel rally.On Monday, Wall Street banks Morgan Stanley and J.P.Morgan cut their estimates for 2005 global growth, blaming high fuel costs for a predicted slowdown in consumer demand.Morgan Stanley reduced its forecast for global expansion next year to 3,6 per cent, down from 3,9 per cent, and warned of more possible revisions.J.P.Morgan scaled back its forecast for US growth to 3,25 per cent for the first half of 2005, down from four per cent.”We are looking at the rise in oil prices as the biggest risk factor if it continues for a long period,” Japan’s Economics Minister Heizo Takenaka said.- Nampa-ReutersPrices are down four per cent in two days from Friday’s close of just below US$55 a barrel.Brent crude in London eased 86 cents to US$48,10 a barrel.The reversal from record highs comes on growing evidence that rocketing fuel costs are starting to slow the economic growth that helped ignite this year’s US$20-a-barrel rally.On Monday, Wall Street banks Morgan Stanley and J.P.Morgan cut their estimates for 2005 global growth, blaming high fuel costs for a predicted slowdown in consumer demand.Morgan Stanley reduced its forecast for global expansion next year to 3,6 per cent, down from 3,9 per cent, and warned of more possible revisions.J.P.Morgan scaled back its forecast for US growth to 3,25 per cent for the first half of 2005, down from four per cent.”We are looking at the rise in oil prices as the biggest risk factor if it continues for a long period,” Japan’s Economics Minister Heizo Takenaka said.- Nampa-Reuters