WTI oil price levels around $72 mark after a steep fall

WTI oil prices are trading higher on Wednesday around the $72 mark after falling nearly three percent yesterday in what many would view as a chaotic market.

US Light crude oil futures for October 2010 delivery was trading at $72.44, 07.00 GMT on the NYMEX after closing yesterday’s session at $71.92

WTI oil futures settled the month of August down nearly nine percent and with concern about a sluggish US economy, weak crude oil demand and plentiful supplies, pressure is expected to remain on oil prices.

Oil traders are beginning to doubt that oil demand will stage a substantial recovery during the second half of 2010, after first-half consumption came in lower than expected.

The value of oil to be delivered during the remainder of 2010 is starting to fall faster than oil available farther in the future, indicating a growing belief that short-term demand will remain weak. November crude-oil futures now cost $1.56 a barrel more than the October contract.

“October is losing ground to November, November is losing ground to December. That’s usually illustrative of a market that is fundamentally weak. Nobody wants the October barrels.” said Peter Donovan, an oil trader with Vantage Trading in New York.