Dollar, demand drive oil lower
NEW YORK - Oil prices fell again yesterday, dampened by a stronger US dollar and more evidence that developed countries such as the United States are cutting back on their energy use.
Light, sweet crude dropped $1.44 to settle at $113.01 a barrel on the New York Mercantile Exchange, after falling as low as $112.31, a new three-month low. Oil is now nearly $35 below its July 11 record high of $147.27.
The International Energy Agency lowered its forecast yesterday for oil product demand from 30 developed countries, located mostly in Europe and North America, to 48.6 million barrels a day, down 1.3 percent from last year.
The Paris energy watchdog's report arrived a day after China said its crude imports in July, while historically strong, were down 7 percent from the same month last year.
The agency cautioned it is too early to determine whether the recent fall in oil prices is a longer-term trend. It said demand in developing countries could offset declines in developed nations, and that it sees Chinese oil demand continuing to grow at a robust pace.
And some economists have said that given the pullback in gasoline prices, demand could come back if motorists feel more comfortable with the cost of filling their gas tanks. Gasoline prices in Massachusetts fell 11 cents a gallon in the most recent survey from AAA of Southern New England. Self-serve, regular unleaded gas averaged $3.78 a gallon, down from $3.89 the previous week and down from a record $4.08 set in the July 7 survey, AAA said.
The average national retail gasoline price was $3.80 a gallon yesterday, according to AAA, the Oil Price Information Service, and Wright Express. That is down a penny from Monday.
A stronger dollar also weighed on oil prices. The euro traded at $1.4914, about the same as late Monday but at its lowest levels since February. The pound traded at its lowest levels since November 2006.