labels: Economy - general
Oil prices retreat 20 per cent below record highs on increased supply, decreased demand news
06 August 2008

Crude oil fell for a third day, trading below $119 a barrel amid signs demand may be curtailed by slowdowns in the US and European economies and as the storm Edouard was downgraded to a tropical depression over Texas.

Oil dropped to its lowest level since early May yesterday as the services sectors in the US and UK contracted in July, and European retail sales fell the most in at least 13 years in June. Edouard made landfall on the Texas coast, idling 6 per cent of US Gulf of Mexico oil output as of yesterday morning.

US crude for September delivery rose 7 cents to $119.24 in electronic trading. On Tuesday, crude futures closed more than $2 lower at $119.17, which was the lowest closing price for oil since 2 May, when oil settled at $116.32.

Due to concern about slumping demand, oil prices have fallen more than $28 from the record high of $147.27 set 11 July. However, US Federal Reserve policy makers left interest rates unchanged yesterday and said inflation risks are a ''significant concern.''

Gasoline for September delivery lost 4.38 cents, or 1.5 per cent, to $2.9564 a gallon on the Nymex yesterday, the lowest close since 1 May. Futures fell 13 per cent last month, the biggest drop since September 2006, as a slowing economy cut demand for the motor fuel.

Regular gasoline at the pump, averaged nationwide, fell 1 cent to $3.871 a gallon, AAA, America's largest motorist organization, said yesterday on its Web site. Pump prices reached a record $4.114 a gallon on July 17, as higher prices curbed demand.

Brent crude for September settlement fell $2.98, or 2.5 per cent, to $117.70 a barrel on London's ICE Futures Europe exchange. The closing price was more than 20 per cent below a record $147.50 a barrel reached 11 July.

OPEC boosted output by 0.7 per cent in July to 32.825 million barrels a day. The gains were led by Nigeria, which had its highest production figure since March, and Saudi Arabia, with the latter's output reaching a three-year high.


 search domain-b
  go
 
Oil prices retreat 20 per cent below record highs on increased supply, decreased demand