Crude prices down amid mixed message on economic impact

Crude oil prices were down again on Thursday amid mixed messages over the effect higher prices are having on the economy, especially in the United States.

On one hand Wal-Mart, the world’s largest retailer, has said that higher oil prices were cutting into consumer spending, and data released during the week have shown that inflation is growing faster than it had been expected to.

Conversely, business activity data announced on Thursday gave the idea that the economy can support higher oil prices. Analysts said that the current fall in oil prices have to do with concerns by investors that if prices stay high, demand will be affected.

Brent crude October contracts on the International Petroleum Exchange lost 16 cents to $62.40 per barrel, 7 percent lower than the record high it reached on Monday. September delivery West Texas Intermediate crude, trading on the New York Mercantile Exchange, fell 25 cents to $63.27 per barrel.

Gasoline futures also fell on the day, losing 4.2 cents to $1.8490 per gallon, almost 9 percent lower than its record high, reached Wednesday. Despite the declines in prices, Goldman Sachs hiked its five-year average crude oil target price to $60 per barrel, up from $45 per barrel, and said that it expects WTI to average $67 per barrel for the rest of 2005 and $60 per barrel in 2006.

Meanwhile, natural gas futures were also down on the day Thursday as data was released showing the volume in storage was well ahead of expectations. September henry hub futures fell 5 percent to $8.915 per million British thermal units.