Oil Plunges on Growing Demand Fears, Glum US Data

Oil's Next Stop $100: Pro

Brent crude oil prices pared losses in afternoon trading Friday after earlier touching a nine-month low near $101 a barrel, as concerns about the strength of the world economy triggered heavy selling in commodities.

Gold, silver and other metals such as copper also fell.

"There's an underlying anxiety in the crude market about demand growth going forward into the second half of the year," said Andy Lebow, vice president at Jefferies Bache in New York.

"Gold came off and industrials are really getting hit today. That's part and parcel of the anxiety over global demand growth."

Stephen Schork, the editor of The Schork Report of energy and shipping market analysis, said losses in one commodity could prompt selling to cover losses in another.

"Margin clerks are definitely calling, so that brought everything down this morning," he said.

"Oil is in a continued a bear run, but there's still a considerable amount of length from a Wall Street standpoint, so it smells like more of a liquidation selloff."

World equities prices retreated on weak data on U.S. retail sales and consumer sentiment, as well as news that Cyprus would ask for billions more in bailout money.

It "caps a week of news pointing to weaker economic growth and less demand for oil" said John Kilduff, partner at Again Capital LLC in New York.

Friday's weak data from the United States followed forecasts for lower global oil demand growth for 2013 released this week by the International Energy Agency (IEA), the U.S. Energy Information Administration (EIA) and the Organization of the Petroleum Exporting Countries (OPEC).

Brent crude futures pared losses, trading at $102.97 a barrel at 2:23 p.m. EDT (18:23 GMT), after a drop of more than $3 from Thursday's close to $101.09, the lowest price since July. The Brent May contract expires Monday.

U.S. light, sweet crude fell more than $2, reaching $91.48 a barrel, having pushed below the 100- and 200-day moving averages on an earlier low of $90.27.

Both crude contracts were on track to post week-on-week losses of more than 2 percent.

U.S. May RBOB gasoline and heating oil futures also fell sharply on the prospects for lowered demand.

Weak U.S. Economic Data

Oil's price slide was hastened after reports showed U.S. retail sales contracted in March for the second time in three months and consumer confidence weakened in April, pointing to slowing momentum in the economic growth in the world's biggest oil consuming nation.

Cyprus said on Friday that an increase in the cost of its total bailout package from the European Union and the International Monetary Fund to 23 billion euros, 5.5 billion more euros than it had initially projected in November, would not lead to additional demands on bank depositors.

The problems in Cyprus have added to concerns about the euro zone economy.

Geopolitical tensions in the Middle East, with Syria's civil war continuing and no resolution in sight of Iran's dispute over its controversial nuclear program, remain a focus for oil investors.

Also demanding investors' attention are developments in Asia, after a U.S. government agency said North Korea has a nuclear weapon it can mount on a missile, adding an ominous dimension to threats of war by Pyongyang, but the assessment was swiftly dismissed by several U.S. officials and South Korea.