New York – Crude-oil prices dropped below $70 a barrel to an eight- week low Tuesday after Hurricane Dean weakened and it appeared the storm would have no lasting effect on Mexican oil production.
Gasoline and natural-gas prices also extended their sharp losses, with traders betting that demand is falling and supplies are safe.
“It’s good news for consumers, certainly,” said Tim Evans, energy analyst at Citigroup Global Markets. “There’s really not much short-term support for natural- gas prices in the absence of hurricane activity.”
There are two more months of hurricane season left to go, though. For now, energy prices are on the decline, but if a storm comes along that disrupts the oil or natural-gas production along the Gulf Coast, it could mean U.S. consumers might have to pay more to fill their cars’ tanks and heat their homes.
Light, sweet crude for September delivery lost $1.65 to settle at $69.47 a barrel on the New York Mercantile Exchange – its lowest close since June 27.
September natural gas, which dropped more than 13 percent Monday, fell another 22.3 cents, or 3.7 percent, to settle at $5.817 per 1,000 cubic feet.
September gasoline futures, which fell 5 percent Monday, extended their losses by 7.28 cents, or 3.8 percent, to settle at $1.8637 a gallon.
“There’s a vacuum of buying,” said Tom Kloza of the Oil Price Information Service in Wall, N.J. “Now you’re testing the limits of how long we can go on a short-term basis.”
Wholesale gasoline prices in some areas have dropped 20 cents a gallon over the past two days, Kloza noted, which could mean much lower pump prices.
