Crude oil fell to the lowest price in almost two months on signs that U.S. economic growth is slowing and nationwide inventories are sufficient to meet demand.
U.S. prices eased and housing starts fell in July to the lowest in almost two years, government reports today showed. Surging economic growth has bolstered fuel demand and prices. Crude oil stockpiles slipped 1.6 million barrels last week, the U.S. Energy Department said. Supplies still were up 10 percent from the five-year average.
``Recent economic data make it clear that the U.S. economy is slowing,'' said Jason Schenker, an economist with Wachovia Corp. in Charlotte, North Carolina. ``A slower economy consumes less fuel. At the same time, we are looking at ample supplies, which point to lower prices.''
Crude oil for September delivery fell $1.16, or 1.6 percent, to $71.89 a barrel on the New York Mercantile Exchange, the lowest closing price since June 26. Prices are up 8.8 percent from a year ago.
Gasoline futures followed crude oil lower. Gasoline for September delivery declined 1.35 cents, or 0.7 percent, to $1.9781 a gallon in New York.
Core Prices
So-called core prices, excluding food and energy, rose 0.2 percent in July, the smallest increase since February, the Labor Department said today in Washington. The U.S. consumes a quarter of the world's oil.
Housing starts in the U.S. fell 2.5 percent to an annual rate of 1.795 million, and building permits dropped 6.5 percent, the most since September 1999, the Commerce Department said.
``The consumer price index and the housing statistics are adding to concern about an economic slowdown, which will eat into energy consumption,'' said Michael Fitzpatrick, vice president of energy risk management at Fimat USA in New York. ``The situation in the Middle East is marginally better because of the cease- fire.''
The Organization of Petroleum Exporting Countries cut its forecast for demand growth in 2006 by 80,000 barrels a day to 1.3 million barrels, in a monthly report that was released today. The world will consume 84.5 million barrels a day this year, the 11- member group said.
Prices have declined this week as the cease-fire between Israel and Hezbollah eased supply concern. The United Nations plans to send 3,500 soldiers to southern Lebanon within 15 days after a more than a month of fighting. Oil surged to a record $78.40 on July 14 on speculation the conflict would spread in the Middle East, source of almost a third of the world's oil.
Iran's Nuclear Program
Oil has risen 18 percent this year partly on concern that Iran, the fourth-biggest oil producer, may cut exports because of a dispute over its nuclear program. The U.S. and the U.K. suspect the Islamic Republic of using its atomic program as cover for the development of a weapon.
Iran is ready to discuss with the European Union the suspension of its atomic activities, the country's Foreign Minister Manouchehr Mottaki said. The UN Security Council on July 31 gave Iran until the end of this month to accept an EU proposal of incentives, and suspend uranium enrichment, or face the threat of economic sanctions.
``The Iranians may be ready to talk, although they always say things in a way that makes you unsure,'' said Tim Evans, an energy analyst at Citigroup Global Markets Inc. in New York. ``This could drag on quite a while. Aug. 31 could come and go without sanctions being implemented.''
Iran's support for Hezbollah, which Israel and the U.S. classify as a terrorist organization, has further increased tensions between U.S. President George W. Bush's administration and the government of Iranian President Mahmoud Ahmadinejad.
Brent crude oil for September settlement declined 72 cents, or 1 percent, to close at $73.08 a barrel on the London-based ICE Futures exchange, the lowest close since July 10. The September contract expired today. The more-active October contract fell 94 cents, or 1.3 percent, to $72.83.
U.S. prices eased and housing starts fell in July to the lowest in almost two years, government reports today showed. Surging economic growth has bolstered fuel demand and prices. Crude oil stockpiles slipped 1.6 million barrels last week, the U.S. Energy Department said. Supplies still were up 10 percent from the five-year average.
``Recent economic data make it clear that the U.S. economy is slowing,'' said Jason Schenker, an economist with Wachovia Corp. in Charlotte, North Carolina. ``A slower economy consumes less fuel. At the same time, we are looking at ample supplies, which point to lower prices.''
Crude oil for September delivery fell $1.16, or 1.6 percent, to $71.89 a barrel on the New York Mercantile Exchange, the lowest closing price since June 26. Prices are up 8.8 percent from a year ago.
Gasoline futures followed crude oil lower. Gasoline for September delivery declined 1.35 cents, or 0.7 percent, to $1.9781 a gallon in New York.
Core Prices
So-called core prices, excluding food and energy, rose 0.2 percent in July, the smallest increase since February, the Labor Department said today in Washington. The U.S. consumes a quarter of the world's oil.
Housing starts in the U.S. fell 2.5 percent to an annual rate of 1.795 million, and building permits dropped 6.5 percent, the most since September 1999, the Commerce Department said.
``The consumer price index and the housing statistics are adding to concern about an economic slowdown, which will eat into energy consumption,'' said Michael Fitzpatrick, vice president of energy risk management at Fimat USA in New York. ``The situation in the Middle East is marginally better because of the cease- fire.''
The Organization of Petroleum Exporting Countries cut its forecast for demand growth in 2006 by 80,000 barrels a day to 1.3 million barrels, in a monthly report that was released today. The world will consume 84.5 million barrels a day this year, the 11- member group said.
Prices have declined this week as the cease-fire between Israel and Hezbollah eased supply concern. The United Nations plans to send 3,500 soldiers to southern Lebanon within 15 days after a more than a month of fighting. Oil surged to a record $78.40 on July 14 on speculation the conflict would spread in the Middle East, source of almost a third of the world's oil.
Iran's Nuclear Program
Oil has risen 18 percent this year partly on concern that Iran, the fourth-biggest oil producer, may cut exports because of a dispute over its nuclear program. The U.S. and the U.K. suspect the Islamic Republic of using its atomic program as cover for the development of a weapon.
Iran is ready to discuss with the European Union the suspension of its atomic activities, the country's Foreign Minister Manouchehr Mottaki said. The UN Security Council on July 31 gave Iran until the end of this month to accept an EU proposal of incentives, and suspend uranium enrichment, or face the threat of economic sanctions.
``The Iranians may be ready to talk, although they always say things in a way that makes you unsure,'' said Tim Evans, an energy analyst at Citigroup Global Markets Inc. in New York. ``This could drag on quite a while. Aug. 31 could come and go without sanctions being implemented.''
Iran's support for Hezbollah, which Israel and the U.S. classify as a terrorist organization, has further increased tensions between U.S. President George W. Bush's administration and the government of Iranian President Mahmoud Ahmadinejad.
Brent crude oil for September settlement declined 72 cents, or 1 percent, to close at $73.08 a barrel on the London-based ICE Futures exchange, the lowest close since July 10. The September contract expired today. The more-active October contract fell 94 cents, or 1.3 percent, to $72.83.
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