Falling demand sends crude prices lower

Evidence of declining demand and an expectation that Wednesday’s US inventories report from the Energy Information Administration will show increased stockpiles sent crude oil prices substantially lower on Tuesday.

A report from the US Energy Department showed that demand for gasoline was down 6.2 percent in the United States in February from January, while overall demand for petroleum products dropped 8.5 percent in February from the month before.

A stronger dollar versus the euro and the end of a refinery strike in Scotland also tended to push prices lower.

In afternoon trade on the New York Mercantile Exchange, June contracts for West Texas Intermediate crude had dropped $2.85 to $115.90 per barrel while Brent crude was down $2.81 to $113.93 per barrel on the ICE Futures Europe exchange in London.

Nymex May gasoline was down 11 cents to $2.92 per gallon and June heating oil fell 5 cents to $3.24 per gallon while June natural gas dropped 42 cents to $10.91 per million British thermal units.

Meanwhile pump prices in the United States continued to set new records as unleaded gasoline added 0.4 cent overnight to a record $3.607 per gallon and diesel fuel was up 0.1 cent to $4.244 per gallon, also a new record.