Iran solution hopes send crude oil lower

The price of crude oil fell significantly on Monday after the president of Iran sent a letter to US President George W. Bush asking that  a solution be found to “the current situation in the world”, referring to the dispute over Iran‘s nuclear program.  This unusual step led hedge funds to close out some of their speculative long positions, which caused oil prices to soar to record highs last week, according to a report from the Commodity Futures Trading Commission.  Despite this latest development, however, the International Energy Agency expects prices to remain high for at least the next two or three years.

The price of West Texas Intermediate crude for June delivery dropped $1.50 to $68.69 per barrel on the New York Mercantile Exchange.  June contracts for Brent crude on the International Petroleum Exchange were down $1.46 to $69.44 per barrel.