Oil prices dip below US$66 a barrel

12-Sep-06

Announcement by Iran that it would consider halting its enrichment of uranium, as well as by OPEC ministers that they would maintain their 28 million bpd production target, have caused oil prices to drop below US$66 a barrel, pushing crude prices down by almost 16% from their all-time record reached in mid-July. Light, sweet crude for October delivery settled at US$65.61 a barrel on the New York Mercantile Exchange. Iran seems poised to consider complying, at least temporarily, with a U.N. Security Council demand that it freeze uranium enrichment as is also seeking assurances that it would not be attacked by the United States during any negotiations with six world powers on enrichment and other nuclear issues. Though global demand figures continue to be strong, markets estimate demand to get thinner as that the U.S. driving season has ended and as winter approaches in the Northern hemisphere. In the event of a mild winter, like last year, prices are expected to tumble further.