Oil prices paused at just above $63 a barrel today after plunging more than 4 per cent the day before on softening US gasoline demand growth and data showing record crude prices feeding into the economy.
Strong US inflation and an earnings warning from the world's biggest retailer Wal-Mart this week gave traders a signal that $60-plus crude was beginning to take an economic toll, potentially eroding the strong oil demand growth that has helped prices more than double in the past two years.
US crude oil slipped 11 cents, or 0.2 per cent, to $63.14 a barrel in early Asian trading as dealers reflected on Wednesday's $2.83 plunge, the biggest one-day fall since April.
London Brent is down 15 cents at $62.41 a barrel.
In 1980, the year after the Iranian revolution, prices averaged an inflation-adjusted $82 a barrel.
Yesterday separate US government figures showed that producer prices rose a higher-than-expected 1 per cent in July on soaring energy costs, and that domestic gasoline demand growth was slowing down in the world's largest consuming country.
The US Energy Information Administration (EIA) said gasoline demand over the last four weeks was only 1.5 per cent above last year, far below the 2.7 per cent rise in June.
A day earlier, statistics showed US July consumer prices rising at their fastest rate in three months and British inflation at its highest level since comparable records began in 1997, gains that could endanger economic growth.
Crude oil stockpiles remain robust thanks to hefty Opec output while inventories of heating oil, used heavily in the Northeast during the winter, are 10 per cent higher than in 2004.
Dealers remain edgy over supplies after a series of outages around the world have eroded production, most recently in Ecuador, where output was cut by over 170,000 barrels per day (bpd) due to protests in two Amazon provinces.