Crude prices fall on storm relief, demand worries

Crude oil prices fell as low as $119.50 per barrel during the session Monday, its lowest level since May 6, after Tropical Storm Edouard lost strength in the Gulf of Mexico and looked like it would miss oil facilities in the region.

Concerns about declines in demand also pushed prices lower, as did the possibility of a compromise over offshore drilling in the United States after Democratic presidential candidate Barak Obama said hew as willing to consider allowing some offshore drilling as part of package toward making the US less dependent on foreign oil.

Even new comments from the head of Iran’s Revolutionary Guard, who reportedly said that his nation could easily close the Strait of Hormuz in the event of an attack against Iran, could not push prices higher.

Almost 40 percent of the world’s oil is shipped through the Strait, which sits between the Persian Gulf and the Gulf of Oman.

September contracts for West Texas Intermediate crude closed down $3.69 to $121.41 per barrel on the New York Mercantile Exchange while Brent crude dropped $3.28 to $120.90 per barrel on the ICE Futures Europe exchange in London.

Nymex September gasoline futures were down 8 cents near the close to $3 per gallon while September heating oil fell 9 cents to $3.35 per gallon and September natural gas dropped $61 cents to $8.78 per million British thermal units.