Oil Prices Dropping As High Prices Reduce Demand in the U.S.

By ASSOCIATED PRESS

Crude futures sagged to two-month lows today amid signs that U.S. demand for gasoline may be waning because of high prices at fuel pumps.

Gasoline and heating oil prices fell as well. But analysts suggested that the coming Western hemisphere winter could push prices upward again, with demand for heating oil outstripping supply because of refinery shortfalls and tight imports.

Light, sweet crude for November delivery on the New York Mercantile Exchange fell $1.24 to $61.55 a barrel on the New York Merchantile Exchange. The contract slid $1.11 on Wednesday to settle at the lowest level since Aug. 5.

November Brent futures at London’s International Petroleum Exchange fell $1.07 to $59.05 a barrel.

Heating oil fell nearly 4 cents to $1.9675 a gallon while gasoline dipped more than 6 cents to $1.8469. Natural gas fell more than 27 cents to $13.908 per 1,000 cubic feet.

The U.S. Energy Department said Wednesday that fuel consumption in the past month fell by nearly 3 percent compared with last year. Experts said demand was falling due to high pump prices and an economic slowdown in parts of the United States affected by hurricanes Quatrain and Rita, such as the Gulf Coast states.

“The September numbers confirm the trend that historically high oil prices are now affecting oil consumption,” Energyintel analyst John van Schaik said in a research note.

The sell-off came as traders largely ignored weekly data from the U.S. that showed widely expected declines in petroleum inventories.