Oil prices tumble below $62
NEW YORK — Oil prices slumped below $62 per barrel Wednesday as the government reported unused gasoline held in storage surged yet again. Retail gas prices have fallen every day for more than two weeks.
Energy markets are undergoing an extended sell-off, the longest this year, with new economic reports dampening optimism about any economic recovery.
Benchmark crude for August delivery fell $1.39 to $61.54 on the New York Mercantile Exchange. In just over one week, oil prices have fallen more than 15 percent.
And on Wednesday, the Organization of Petroleum Exporting Countries predicted that demand for crude has fallen so sharply, it will take another four years to recover to 2008 levels.
“So far there is no clear evidence of oil demand returning,” said Victor Shum, an energy analyst with Purvin & Gertz.
That can be seen in the amount of gasoline that is building up in storage tanks.
The Department of Energy reported Wednesday that gasoline supplies grew by another 1.9 million barrels last week, the fifth straight week that storage levels have grown.
This year, that hasn’t seemed to matter, with billions flowing into energy markets because of the weak dollar. Investors have used crude as a hedge against inflation, but that has driven energy prices higher.
Federal regulators said Tuesday they would examine whether the government should impose limits on the number of futures contracts in oil and other energy commodities held by speculative traders.
Concerns about the affect of volatile energy prices has spread overseas as well. It will be one of the topics discussed by world leaders meeting in Rome for the Group of Eight summit.
In a letter published by The Wall Street Journal, British Prime Minister Gordon Brown and French President Nicolas Sarkozy also called for closer government oversight of the oil-trading markets.
Retail gasoline prices dropped again overnight, the 16th straight day, to a new national average of $2.593 per gallon. Last year, prices were above $4 at this time, according to AAA and the Oil Price Information Service.
In other Nymex trading, gasoline for August delivery slid by 2.8 cents to $1.7046 a gallon and heating oil lost about 2.5 cents to $1.5762. Natural gas for August delivery fell 7.4 cents to $3.355 per 1,000 cubic feet.
In London, Brent prices shed 69 cents to $62.54 a barrel on the ICE Futures exchange.
Associated Press writers Eileen Ng in Kuala Lumpur, Malaysia, and George Jahn in Vienna contributed to this report.
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