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Wednesday, 23 July 2008

Oil hits six-week low, storm fears ease

NEW YORK: Oil prices fell to a six-week low on Tuesday amid concerns over sliding U.S. energy

demand and expectations that a hurricane pushing through the Gulf of Mexico would spare most

offshore oil production. The losses extend a decline from the July 11 peak over $147 a barrel that has marked the steepest price fall in dollar terms in oil`s history -- leading some analysts to question how soon the market will resume its six-year rally.

"We`ve now seen more than a $20 decline in the crude oil market from the highs and this suggests that we`ve seen enough of a shift in the supply and demand balance on a larger scale to cap the market," said Tim Evans, energy analyst for Citi Futures Perspective in New York.US crude futures fell $3.09 to settle at $127.95 a barrel after dipping as low as $125.63 -- the lowest level since early June. London Brent crude fell $3.23 to $129.38 a barrel.

Dealers said mounting economic trouble in the United States and continued lackluster energy demand from the world`s biggest consumer nation were the key focuses of oil`s slide. Gasoline consumption in the United States is running about 2.2 percent below year-ago levels in a

sign drivers stunned by soaring pump prices are curbing their road travel. Even so, oil remains nearly 30 percent higher than at the start of this year, and more than six times higher than in 2002, in a rally driven by startling growth in China and other developing Asian economies. Courtesy:Economic Times


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