The price of oil fell to its lowest in more than two weeks because of decreased demand and growing stockpiles in the US to ensure sufficient supplies during the North Atlantic hurricane season, Bloomberg reported.
Crude oil for September 2009 delivery dropped as much as $0.66, or 1%, to $66.85 a barrel in after-hours electronic trading on the New York Mercantile Exchange, the lowest since 31 July. It was at $66.93 at 10.01am in Singapore.
Oil traded at less than $70 a barrel for a second day after a surprising turn down in US consumer confidence and reports showing gasoline demand in the nation at its lowest in more than 12 weeks.
The National Hurricane Center said that Tropical Storm Claudette, the first to make landfall in the US this season, may strengthen as it approaches the Florida Panhandle.
US crude oil inventories increased in the past three weeks as refiners dropped gasoline production with the end of the summer driving season. Distillate stockpiles, which comprise diesel and heating oil, are near their highest in 25 years.
Tropical Storm Claudette, with winds near 50 miles (80km) per hour, was about 95 miles southeast of Pensacola moving towards the Florida coast at about 12 miles an hour, the Hurricane Center said in an advisory on its website.
According to Energy Department data, the rigs and platforms in the northern Gulf of Mexico accounted for about 23% of US oil output in 2008.
Brent crude oil for October 2009 settlement declined as much as $0.55, or 0.8%, to $70.89 a barrel on London’s ICE Futures Europe exchange. Futures were traded at $70.95 at 9.54am Singapore time.
In September 2008 Hurricane Ike shut almost all the region’s oil production and about 20% of the nation’s refining capacity. Hurricanes Katrina and Rita, which struck in 2005, killed more than 1,800 and did more than $71.3bn-worth of damage.