Oil below $69

24/06/2009

Crude prices dropped in New York this morning (June 24th) as data from the American Petroleum Institute showed that demand for gasoline waned last week.

Although analysts were expecting a rise in gasoline inventories, the 3.7 million-barrel surge was far bigger than expected and this put downward pressure on crude prices as analysts re-evaluated the demand environment.

By 05:42 Eastern Time, the New York Mercantile Exchange's August delivery contract was trading at $68.99 (£41.62) a barrel, down 25 cents. Earlier in the day it had dipped to $68.06.

Speaking to Bloomberg, Gerrit Zambo, an oil trader at BayernLB, said by phone from Munich: "It's still a dark picture. The economic numbers of the past weeks don't back up the recent rise in the oil price."

Francisco Blanch, head of global commodity research at Banc of America Securities-Merrill Lynch, added that trading in crude and other petroleum commodities such as heating oil has pushed prices up too far.