Oil prices slipped back from a record this evening as worries over the health of the US economy resurfaced.
US oil fell $1.70 to $92.83 a barrel after striking an all-time high of $96.24 a barrel. Brent crude traded down $1.63 to $89.00 a barrel after hitting a record $91.71 earlier.
The decline came as the financial sector dragged down the stock market after brokerages downgraded the two largest US banks, renewing fears of more fallout from the credit crisis. Weakness in the US economy could further slow demand growth from the world's top energy consumer.
Energy analysts added that traders were taking profits from oil's 40% rally since mid-August. US crude's recent run up has brought it close to the inflation-adjusted high of $101.70 hit in 1980, as experts eye slimming stockpile levels in the world's major consumers.
OPEC has agreed to inject an extra 500,000 barrels a day starting in November, but has shrugged off calls for an additional hike. OPEC oil ministers blame speculators, political tensions and a weak dollar for driving up the cost of fuel and have resisted consumer calls for more oil.
Oil soared about 5% yesterday after US refiners drained 3.9 million barrels of crude from storage. The surprise decline came at a time when the world's thirst for oil is climbing toward its seasonal fourth-quarter peak as winter arrives in the northern hemisphere.
Prices also were buoyed by the Federal Reserve's decision on Wednesday to lower US interest rates by a quarter percentage point to reduce the risk of a slowdown in the world's biggest economy. Oil in New York has more than quadrupled from below $20 a barrel in early 2002.
