Oil prices edge down on demand worries

NEW YORK -- Crude prices fell slightly on Monday as traders continued to assess how a slow economic recovery will affect the strength of U.S. oil and gas demand.

Benchmark crude for May delivery lost 13 cents at $84.79 in early afternoon trading on the New York Mercantile Exchange. Earlier prices extended to $85.44.

Crude shot to an 18-month high above $87 last week from $69 in early February on optimism that oil demand would grow with a recovering global economy. But U.S. petroleum consumption remains weak.

U.S. motorists face rising gasoline prices as crude prices climb and analysts predict rising demand in the summer months.

Energy analyst Stephen Schork said Monday that another factor is also at play. He said that a rising supply of expensive crude oil imports from countries like Russia, and a decline in imports from cheaper suppliers such as Venezuela, contributes to higher prices at the pump.

"That $3 barrier looks like a foregone conclusion in the U.S.," he said, referring to analysts' expectations for $3 a gallon (79 cents a liter) summer pump prices.

Crude prices also have moved in the same general direction as stocks. On Monday, the Dow Jones Industrial Average continued its march past 11,000, rising about 28 points at midday.

In other Nymex trading in May contracts, heating oil added 0.6 cent at $2.2320 a gallon, and gasoline gained 1.81 cents at $2.3074 a gallon. Natural gas fell 8.7 cents to $3.983 per 1,000 cubic feet.

In London, Brent crude rose 27 cents to $85.10 on the ICE futures exchange.