Oil prices dip by almost two dollars

20-Sep-06

Oil prices dipped by almost US$2 a barrel, bringing crude oil futures to a 6 month low, and helped weigh down already sinking gasoline prices. Light sweet crude for October delivery fell to US$62 a barrel on the New York Mercantile Exchange, where gasoline futures sank by more than 8 cents to $1.50 a gallon. This slide was triggered by easing of supply threats and signs of economic weakness in the U.S. signaled a potential cooling of energy demand. Global inventories of crude oil are rising and demand is tapering off in the U.S. The market also signals that the housing market could have a bigger impact on the economy going forward. On the supply side, pre-summer fears that hurricanes would disrupt Gulf of Mexico oil production have so far not materialized. Traders are also less fearful that Iran will pull oil off the market.