Oil falls further on demand concerns

By Maryelle Demongeot

SINGAPORE (Reuters) - Oil edged down on Thursday, adding to the past two sessions' $5 losses, as India and Malaysia's decisions to raise fuel costs, together with weaker U.S. consumption, heightened worries about falling oil demand.

U.S. light crude for July delivery CLc1 fell 26 cents to $122.04 a barrel by 7:24 a.m., having settled down $2.01 on Wednesday at $122.30, its lowest settlement in almost a month.

London Brent crude LCOc1 fell 45 cents to $121.65.

"Weaker demand is the main concern now," said Tetsu Emori, fund manager at Astmax in Tokyo. "With domestic prices in these emerging countries now quite high, people will cut their consumption and that is a worry for the market."

India and Malaysia raised retail fuel prices on Wednesday, joining a growing number of Asian nations no longer able to afford big subsidies in the face of record-breaking oil prices.

India raised retail petrol and diesel fuel prices by about 10 percent and Malaysia hiked petrol prices by 41 percent.

Taiwan, Sri Lanka and Indonesia reviewed their subsidies last month.

U.S. weekly data added to the bearish sentiment as larger-than-expected builds in products stocks, and falling gasoline demand, trumped a surprisingly big drawdown in crude oil stocks.