January 19, 2008	Saturday	Muharram 09, 1429

LONDON, Jan 18: Oil prices rose on Friday at the end of a week in which they have slumped further from recent record highs of above $100 amid concerns about a possible drop in energy demand, dealers said.

They said growing concerns over the economic outlook in the United States, the world’s largest energy consumer, had put pressure on the market.

New York’s main contract, light sweet crude for delivery in February, gained 87 cents to $91.00 per barrel.Brent North Sea crude for March firmed 95 cents to $89.70.

“A lot (of oil’s movement) will depend on the financial markets and other commodity markets,” said Base Commodities trader Tony Machacek in London.

Equity markets have tumbled this week on fears of a US recession, a development that would dampen demand for energy in the world’s biggest economy.

“The drop in demand is certain in the short term with the economic slowdown in the United States affecting sentiment worldwide,” said Tony Nunan, of Mitsubishi Corp’s international petroleum business in Tokyo.

“Everyone stops spending and that will drive prices further down,” he said.

Trading was volatile and in a “worst-case scenario” prices could fall as low as $69, he added.

“I can see prices dropping to the lower 80s or even the higher 70s as we move towards the end of the first quarter.”

“If the US falls into recession and China slows down, we could be headed for one of the most significant corrections of this decade in oil,” said Phil Flynn, an analyst at Alaron Trading.

Prices remain at high levels but have shed more than $10 since striking a record in New York of $100.09 in early January.

They had tumbled Wednesday in reaction to a report of an increase in US crude reserves and after Bush called on Opec members to hike output.—AFP