Page last updated at 18:57 GMT, Monday, 21 September 2009 19:57 UK

Oil prices slide on demand fears

Oil worker

Oil prices have fallen by almost $3 on fears that energy demand may not have recovered as much as thought.

US crude was down $2.78 at $69.26 a barrel before recovering slightly while in London Brent crude went as low as $2.96 to $68.36 a barrel.

A report by the Centre for Global Energy Studies said there was unlikely to be a sustained rise in prices until a global recovery was well established.

Market participants were also nervous before this week's G20 meeting.

The summit in Pittsburgh is likely to address whether further measures are needed to support the world economy, or whether stimulus plans can be withdrawn.

"There will be little or no sustained upward pressure on oil prices until global economic recovery is firmly established and reviving oil demand begins to draw down bulging oil inventories," analysts at the Centre for Global Energy Studies said.

"Even next year prices are unlikely to rise much unless clear signals emerge that the world is pulling out of recession in a sustainable fashion."

Another report from energy information firm Platts also suggested that energy demand in China, the world's second largest consumer of oil, slowed in August.

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