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Prices of Gas, Oil Are Down

Posted on: Thursday, 22 September 2005, 03:00 CDT

NEW YORK - Crude oil and gasoline prices dropped Friday as traders' worries over crude shortages, high oil demand and Tropical Storm Ophelia calmed down.

Light sweet crude for October delivery on the New York Mer- cantile Exchange fell $1.04 to $63.45 Friday in afternoon trading. Nymex crude is more than $7 off its peak of $70.85 a barrel briefly reached Aug. 30, but is still almost 50 percent higher than a year ago.

On London's International Petroleum Exchange, October Brent futures fell 57 cents to $62.51 a barrel.

Gasoline futures slipped more than 10 cents to $1.9350 a gallon, while heating oil fell nearly 5 cents to $1.8820 a gallon. At the pump, however, drivers were paying more than $3 a gallon on average.

"There's a little more optimism that things are getting better," said Phil Flynn, an analyst at Alaron Trading Corp. in Chicago. He added that traders are reassured about oil supply as crude imports stream in and are betting that Tropical Storm Ophelia off Florida's coast won't disrupt production.

Also Friday, the International Energy Agency lowered its projected growth in oil demand this year and next year- but only in part because of Katrina, saying high prices were choking demand even before the storm hit.

The Paris-based agency said daily world oil demand this year would grow by 1.35 million barrels to 83.48 million barrels - 250,000 barrels less than its previous forecast.

The energy watchdog also cut its estimate of demand growth by the same amount for next year to 85.25 million barrels a day.

Mr. Flynn said most oil traders do not typically put much stock in energy agency reports, but in these skittish times, "any news story is likely to make them jump over the edge."

Source: Augusta Chronicle, The

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