Oil eased further below $65 today on fears that record high prices are undermining global demand.
US light crude was trading down 26 cents at $64.49 a barrel by early this morning, extending a loss of 34 cents on Thursday. London Brent crude slipped 16 cents to $63.50 a barrel.
US prices have fallen sharply from a record high $70.85 on August 30th, just a day after Hurricane Katrina hit the US Gulf Coast, toppling oil platforms and shutting down refineries.
Oil's relentless rally - adding 49 per cent this year - has been checked by fears of slowing demand growth, reinforced this week by US data showing a decline in weekly gasoline use.
OPEC yesterday cut its forecast for oil demand growth this year due to the impact of rising costs, which have triggered protests in Europe and fiscal woes in parts of Asia.
OPEC, pumping at its highest rate in a quarter century, will consider increasing output when it meets next week, but leading members say they see little hope of more crude supplies easing prices inflated by a feared shortage of refined fuels.
Analysts say crude stocks are still abundant and refiners have no need of extra supplies, an argument supported by the US government's sale of only 11 million barrels of emergency reserves, about a third of the total it had offered.
Reinforcing the view that global supplies are sufficient to avoid an energy crisis, the International Energy Agency has decided not to extend or expand its 30-day global release of emergency stockpiles, meant to head off US fuel shortages.
The agency will next review the plan in late September or in early October.