Crude prices lower as IEA cuts demand forecast

Crude oil prices fell again Tuesday after earlier gains on concerns about how the situation in Georgia will affect oil shipments between Asia and Europe.

Russian President Dmitry Medvedev ordered a cease-fire during the day and he and French President Nicolas Sarkozy proposed a cease-fire plan, but Georgia has yet to agree to it.

By the end of the session, however, worries about falling demand outweighed geopolitical concerns after the International Energy Agency cut its estimate of oil demand for the year to 48.6 million barrels per day.

September contracts for West Texas Intermediate crude were down $1.38 to $113.07 per barrel on the New York Mercantile Exchange, while Brent crude was also down $1.38 at last report to $111.29 per barrel on the ICE Futures Europe exchange in London.

Nymex September gasoline futures were down a cent to $2.86 per gallon while September heating oil dropped 2 cents to $3.10 per gallon in afternoon trade.