WASHINGTON -- Crude oil futures fell by more than $1 a barrel yesterday as the first named storm of the Atlantic hurricane season was expected to steer clear of the Gulf of Mexico's petroleum infrastructure. Light trading volume exacerbated the move, analysts said.
But oil prices stayed above $70 a barrel, and analysts said the longer-term direction of the market remains murky.
Alaron Trading Corp. analyst Phil Flynn said energy traders are having a difficult time sorting through mixed signals on inflation, US gasoline demand and the UN's diplomatic standoff with Iran. ``Until there's more clarity, there will be continued volatility," he said.
While tensions in the Middle East underpin high world oil prices, there was also a measure of relief yesterday that Iran had accepted some parts of a Western offer aimed at getting the country to halt its nuclear program. At the same time, the head of the UN atomic watchdog agency told a 35-nation meeting he had made little progress in his probe of suspicious aspects of Iran's nuclear program.
Light sweet crude for July delivery declined by $1.27 to settle at $70.36 a barrel on the New York Mercantile Exchange, where gasoline futures fell by 2.85 cents to settle at $2.1243 a gallon. July Brent crude on London's ICE Futures settled $1.55 lower at $68.93 a barrel.
Tropical Storm Alberto had maximum sustained winds near 70 miles per hours, just below hurricane strength of 74 miles per hour, the National Hurricane Center said, and it was expected to reach Florida today.
Authorities issued a hurricane warning and called for evacuations along Florida's Gulf Coast.