Light, sweet crude for October delivery settled at US$107.8 a barrel on the New York Mercantile Exchange- the lowest settlement price in five months. This dip has been affected by lower than expected drop in U.S. gasoline supplies that is fuelling the reason that a cooling economy is forcing Americans to drive less. US gasoline stocks fell by 1 mln barrels to 194.4 mln barrels for the week ending Aug 29, less than the anticipated 1.8 mln barrel drop.
On Tuesday, oil prices plummeted by almost six dollars as a result of lesser than anticipated damage from Hurricane Gustav, dragging oil prices around the hundred dollar mark- a level not seen since April 1. On Wednesday, oil prices settled at US$109 a barrel.
The dollar continues gaining strength-prompting investors to shift funds out of commodities like oil and precious metals, conventionally bought as hedges against inflation. Oil companies in western part of Gulf of Mexico, whose equipment wasn't in the path of the storm have started increasing operation rates. 95.2% of oil production and 87.5% of natural gas output remained shut down as of Thursday.
05-Sep-08 
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