Lagging demand hurts WTI prices

The price of oil was down slightly just before the close of floor trade in New York on Monday after rising to nearly $80 per barrel earlier in the session on a significant increase in sales of existing homes in October.

The National Association of Realtors reported that sales of previously owned homes was up more than 10 percent last month to its highest level in over two years, primarily owing to a tax credit for first-time buyers.

The jump in home sales raised hopes that demand for gasoline will rise, but demand remains below last year at this time even though AAA expects 2.1 percent more American will drive more than 50 miles from home over the upcoming Thanksgiving weekend, more crude oil than usual is in storage, and Valero became the latest refinery to announce, last Friday, that it was shutting down a refinery.

With just a few minutes left before the close of floor trade on the New York Mercantile Exchange, December contracts for West Texas Intermediate crude was down 10 cents to $77.37 per barrel, although at last report January Brent crude contracts were up 41 cents to $77.61 per barrel on the ICE Futures Europe exchange in London.

In afternoon trade, Nymex December gasoline futures were up 2 cents to $2.00 per gallon while January heating oil added a cent to $2.02 per gallon and January natural gas had gained 6 cents to $4.82 per million British thermal units.

The retail price of a gallon of gasoline in the United States dropped slightly overnight but remained at $2.64 per gallon on average nationally.