Crude futures dropped to the lowest settlement in nearly three months
yesterday as the US dollar gained against the euro, and OPEC said there is
enough supply and prices are too high.
Light, sweet crude for September delivery fell US$2.54 to settle at US$122.19
a barrel on the New York Mercantile Exchange, the lowest settlement since May 6
when price settled at US$121.84 a barrel. Futures tumbled more than US$4 to
US$120.42 a barrel in the early morning trading.
The dollar gained a strong 1.2 percent against the euro yesterday as the US
July Consumer Confidence Index came above previously expected. A rising dollar
curbed the appeal of buying commodities as a hedge against inflation.
The crude price was also pressured after OPEC President Chakib Khelil said in
Jakarta, Indonesia, that there were enough supply to meet the demand in the oil
market, and that prices were being inflated by geopolitical tensions.
Meanwhile, falling fuel demand continued to weigh on the market. The US
Transportation Department said Monday that US vehicle drivers traveled 9.6
million miles less in May than the same time last year, marking a biggest drop
in the usually busy summer driving season. Crude oil has lost more than 18
percent compared with its record US$147.27 a barrel achieved on July 11.
In London, Brent crude for September delivery slid US$3.13 to settle at
US$122.71 a barrel on the ICE Futures Exchange.
