Houston Chronicle – Oil traders sent crude prices tumbling as low as $118 a barrel Tuesday amid a growing belief that a U.S. economic slowdown and high energy costs are curbing consumer demand for gasoline and other petroleum products.
Crude oil finished the day just above $119 a barrel, its lowest settlement price since early May. Tropical Storm Edouard made landfall on the Texas coast but had little effect on oil production in the Gulf of Mexico.
A day after plunging as much as $5 a barrel in a dramatic sell-off, crude continued its downward trend. Gasoline and heating oil prices also fell, while natural gas ended unchanged after Monday’s steep drop.
Light, sweet crude for September delivery fell $2.24 to settle at $119.17 a barrel on the New York Mercantile Exchange, the lowest close since May 2. During trading, the contract dipped to $118 — nearly $30 below the trading high of $147.27 reached July 11.
"The market psychology has finally shifted," said Stephen Schork, an analyst and trader in Villanova, Pa., adding that "$4-a-gallon gasoline has clearly killed demand."
