WASHINGTON -- Oil and gasoline futures fell yesterday after OPEC said high prices were affecting demand, and the prospect of rising interest rates fueled market concerns about economic growth. But worries over Iran's nuclear ambitions and how they might affect oil supplies, kept oil prices hugging the $69-a-barrel level.
The market largely shrugged off minor Gulf Coast refinery snags caused by heavy rains.
A BNP Paribas Commodity Futures broker, Tom Bentz, said oil prices are likely to remain under pressure -- and could fall below $68 a barrel -- amid increased concerns about slowing economic growth.
In its June report, the Organization of Petroleum Exporting Countries noted that oil demand has not risen as much as expected, given global economic activity now. ``Signs indicate an easing in oil demand, partly due to the high prices," according to the cartel, which forecast a 1.4-million-barrel-per-day increase in world oil demand in 2006.
Light, sweet crude for July delivery fell 90 cents to settle at $68.98 a barrel on the New York Mercantile Exchange, where gasoline futures fell 4.68 cents to settle at $1.9914 a gallon.
Brent futures for August were down 66 cents and fetching $68.14 on London's ICE futures exchange.
US retail gasoline prices fell for first time in three weeks, declining 3.5 cents over the last week to a national average of $2.87 a gallon.
The pump price for regular unleaded gasoline is still 71 cents higher from a year ago, the federal Energy Information Administration said in its weekly survey of service stations.
On Sunday, Iran accused the United States of steering Europe away from a possible compromise over the issue of Iran's nuclear ambitions. Foreign Ministry spokesman Hamid Reza Asefi said America's insistence on conditional negotiations over a Western incentive package has narrowed the scope of potential talks and made it tougher for all parties to reach a solution. Asefi reiterated that enriching uranium was his country's unalienable right, and that no conditions should be placed on the talks.