Chris Cantell Discusses Markets: Oil prices drop after storm threat eases by Martina Janeckova

On Monday August 4, 2008 oil prices fell sharply to a three-month low, falling below $120 a barrel after tropical storm Edouard seemed less likely to disrupt oil and natural gas output in the Gulf of Mexico. Edouard was threatening to gain near-hurricane speeds and therefore Shell Oil Co. began to evacuate about 40 workers from some of its operations in the western Gulf. But according to one financial firm that specializes in the energy industry, Edouard is not likely to disrupt production. Light, sweet crude for September delivery fell $3.69, or 2.9 percent, to settle at $121.41 a barrel on New York Mercantile Exchange. Earlier, prices plummeted to $119.50, the lowest price level since May 6. Natural gas futures also fell sharply, dropping 66.3 cents, or 7.1 percent, to settle at $8.726 per 1,000 cubic feet. Gasoline futures fell 8.41 cents, or 2.7 percent, to settle at $3.0002 a gallon. Other commodities including gold, copper, corn and soybeans also traded lower. Retail gas prices kept falling, gas has fallen 5.6 percent since the peak of above $4 a gallon on July 17. Heating oil futures fell 8.67 cents to settle at $3.3501 a gallon. In London, Brent crude for September delivery fell $3.50 cents to settle at $120.68 a barrel, after earlier falling to a contract-low of $118.80. Fall of crude oil prices came as traders ignored the rising tensions between the West and Iran. Iranian President Mahmoud Ahmadinejad said his country would not give up its “nuclear rights”. Bush administration said that 5 permanent members of the U. N. Security Council and Germany have agreed to call for more sanctions against Iran.

by Martina Janeckova for PocketNews (http://pocketnews.tv)

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posted by Lucia Adamova