Oil falls toward $88 amid signs of weak US demand

SINGAPORE—Oil prices fell toward $88 a barrel Thursday in Asia amid signs of sluggish US consumer demand.

Benchmark oil for October delivery was down 21 cents to $88.70 at late afternoon Singapore time in electronic trading on the New York Mercantile Exchange. Crude fell $1.30 to settle at $88.91 on Wednesday.

In London, Brent crude for November delivery was steady at $109.65 on the ICE Futures exchange.

The Commerce Department said Wednesday that retail sales were flat in August. The government retail sales report is the first major read on consumer spending, which accounts for 70 percent of economic activity, for August.

Some analysts expect oil prices to rise over the next year despite weak demand growth in developed countries. Goldman Sachs forecasts Brent crude will jump to $130 in 12 months because of strong consumption in developing nations such as China and less-than-expected supply from non-OPEC producers.

“Emerging market demand growth has remained quite robust and we anticipate it will remain quite supported over the next 12 to 24 months,” said Allison Nathan, senior commodities economist with Goldman Sachs.

In other Nymex trading for October contracts, heating oil rose 0.9 cents at $2.95 per gallon and gasoline futures gained 0.4 cents at $2.73 per gallon. Natural gas for October delivery jumped 1.1 cents to $4.05 per 1,000 cubic feet.