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NEW YORK: World oil prices declined on Thursday as demand angst re-emerged a day after prices had risen in the wake of a report showing a sharp drop in US gasoline stocks, traders said.
The dip put an end to price gains which started on Tuesday after crude prices in London struck a four-month low point near 110 dollars.
New York's main oil futures contract, light sweet crude for September delivery, lost 99 cents to close down at 115.01 dollars per barrel. The contract had rallied almost three dollars a day earlier.
In London, Brent North Sea crude for September delivery declined 83 cents to settle at 112.64 after adding 2.32 dollars the previous day.
"Crude has regained some of its losses over the past few trading sessions reacting to the (Wednesday) inventory report which showed very substantial stock draws in gasoline," said energy analyst Victor Shum at Purvin and Gertz in Singapore.
Shum said that slowing global energy demand resulting from the weakening economies of the United States, Europe and Asia was likely to weigh down further on oil prices in future weeks.
"Concerns about the US economy and now the spread of the economic slowdown to Europe and Asia could push crude oil pricing to test lower lows because some of the supply issues have been discounted by the market," Shum said.
Prices had been supported earlier this week after the US Department of Energy reported Wednesday in a weekly update that US gasoline reserves had fallen by 6.4 million barrels in the week ended August 8. That was worse than forecasts which had called for a drop of just 2.0 million barrels.
Gasoline stocks are closely watched at this time of year as American motorists hit the highways for their summer vacations, typically pushing up demand for gasoline, which is refined from crude oil.
Dealers said that fears of supply disruption had receded after Russia and Georgia agreed to a French-brokered peace plan following several days of hostilities.
British energy giant BP, meanwhile, said on Thursday that it had resumed pumping gas through the South Caucasus pipeline which transits Georgia, but that the Baku-Supsa oil link remained shut.
BP had stopped pumping into the South Caucasus pipeline (SCP), which snakes from Baku in Azerbaijan into Georgia and on to the Turkish border, on Tuesday as a precautionary measure amid fighting between Russian and Georgian troops.
BP's Baku-Supsa oil pipeline remains shut but oil and gas supplies continue to flow from the energy-rich Caspian Sea to the West by other routes.
Energy supplies from the region have, however, already hampered by the closure of the key Baku-Tbilisi-Ceyhan (BTC) oil pipeline, which BP also operates.
- AFP/so
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