Oil Prices Continue To Fall

August 17, 2006

After unprecedented highs, crude oil futures in New York fell to the lowest price in 2 months of $70.44 a barrel.

Demand for motor fuel fell by 1.7 percent resulting in gasoline futures dropping by 17 percent. The demand for gasoline dropped by 167,000 barrels a day causing the price fall in crude oil futures.
Oil also fell this week due to the Lebanon-Israel cease-fire.
The September delivery of crude oil fell by 89 cents to $71 a barrel but oil is still up 12 percent from a year ago.

Gasoline for September delivery fell by 3.31 cents to $1.94 a gallon. The highs in gasoline were based on a lot of speculative buying centered around the hurricane season. But things are looking peaceful and concerns are reduced.

A possible slowdown in the US economy is also contributing to the falling oil prices. The index of leading economic indicators dropped at the rate of 1.4 percent over the last 6 months.

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