Oil prices ended lower last night on signs that high energy costs are slowing the economic growth that has fueled this year's sharp increase in world oil consumption.
US light crude on the New York Mercantile Exchange settled at $53.29 a barrel, off 38 cents on the day, following Monday's $1.26 slide from a record close on Friday of $54.93. Prices are down three percent in two days.
Brent crude in London eased 14 cents to $48.77 a barrel on the International Petroleum Exchange. The reversal came as evidence mounts that rocketing fuel costs are starting to slow the economic growth that ignited this year's demand-led oil rally.
Demand growth, led by China, has raced along this year at a 24-year peak of 2.7 million barrels per day, 3.4 percent of the 82.4 million bpd world market.
On Monday, Wall Street banks Morgan Stanley and J.P. Morgan cut their estimates for 2005 economic growth, saying high fuel costs were likely to mean a slowdown in consumer demand.
Economic officials in the United States, Europe and Japan have sounded warnings on the impact of surging oil prices.
French Finance Minister Nicolas Sarkozy yesterday said he would propose to his European Union peers joint action to ensure that high oil will not damage growth.
Speaking to parliament, Mr Sarkozy stuck by his government's forecast for the French economy to grow by 2.5 percent next year, but he added he was "aware of the tension" created by oil.