Oil turns heel on Nymex

23/06/2009

Oil prices have slipped further in New York this morning (June 23rd), extending heavy losses seen yesterday.

By 04:07 Eastern Time, the August delivery contract had dropped to $66.92 (£41.19) a barrel, down 58 cents on yesterday's settle price.

At the close of trading on Monday, the July delivery contract dropped $2.62 on the barrel before its expiry, with the selloff initiated by a re-evaluation of the supply and demand conditions of the petroleum market.

The Associated Press reports that the four per cent drop was evidence of traders realigning prices to take into account the oversupply in crude and petroleum products such as heating oil and gasoline in recent months.

Tom Kloza, publisher and chief oil analyst at Oil Price Information Service, said that gasoline is likely to fall particularly sharply as falls in futures contracts filter through to the pumps.

"I think we'll see price drops every day this week," he predicted.