Oil prices dropped in New York after the World Bank forecasted that the global downturn will be deeper than estimated; increasing concern fuel demand will reduce, according to Bloomberg.
Crude oil for August delivery on the New York Mercantile Exchange dropped as much as $1.13, or 1.7%, to $66.37 a barrel.
On 22 June the contract dropped 3.6% to settle at $67.50 a barrel. The July 2009 contract expired at $66.93.
Oil fell over $2 a barrel yesterday after the World Bank projected the world economy will contract 2.9% in 2009, more than an earlier projection of 1.7%.
Crude has increased 25% in the past three months as the weaker dollar raised demand for commodities as a hedge against inflation.
Last week, the Energy Department said the total US daily fuel demand in the four weeks ending 12 June was down 6% from a year earlier.
Gasoline inventories rose 3.39 million barrels to 205 million in the week ended 12 June.
Gasoline supplies rose one million barrels the previous week, according to the median of ten estimates by analysts surveyed by Bloomberg News.
Brent crude oil for August 2009 settlement fell as much as $1.08, or 1.6%, to $65.90 a barrel on London’s ICE Futures Europe exchange. It was traded at $66 at 10:55am Singapore time.