Crude prices drop another $3 per barrel in New York trade
Crude oil prices were down more than $3 per barrel again Monday in afternoon trade in New York as investors reacted to the downgrade of US credit by Standard & Poor’s late Friday, when the ratings agency cut its rating on US credit from AAA to AA-plus, with a negative outlook.
The downgrade exacerbated continuing concerns about the US economy and possible declines in demand for oil and oil products.
Analysts predicted that prices will go even lower in the short-run as investors put more cash into safer investments, such as gold.
However, some analysts still see prices going up in the longer term as inventories and spare capacity drop and prices will have to go up to deep demand in line with supply, with Goldman Sachs reiterating its prediction that Brent crude will average $130 per barrel next year.
September contracts for West Texas Intermediate crude were down $3.17 to $83.71 per barrel at 1:30 p.m. on the New York Mercantile Exchange, while Brent crude was most recently reported $3.02 lower to $106.35 per barrel on the ICE Futures Europe exchange in London.
Nymex September gasoline futures were down 5 cents to $2.76 per gallon in afternoon trade in New York, while September heating oil futures dropped 7 cents to $2.87 per gallon but September natural gas futures added less than a cent to $3.95 per million British thermal units.
The retail price of gasoline was a cent lower overnight in the United States, with drivers paying on average $3.663 per gallon for regular unleaded.
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