Oil falls near $119 on demand concerns By PABLO GORONDI, Associated Press Writer
3 minutes ago



Oil prices slid further Tuesday, dropping to as low as $118 a barrel on widening expectations that the slumping U.S. economy will keep eroding consumer demand for gasoline and other petroleum products.

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The U.S. dollar's gains against the euro also contributed to oil's decline. Light, sweet crude for September delivery was down $1.51 at $119.90 a barrel in premarket trading on the New York Mercantile Exchange. Earlier, it dropped to $118, before regaining some ground.

Crude has now fallen more than $25 since reaching a trading high of $147.27 on July 11. The growing belief that soaring prices have stifled demand has halted what appeared to be a relentless march higher.

"The main factor weighing on oil prices is worries about oil consumption being weakened, especially in the U.S.," said David Moore, a commodity strategist with Commonwealth Bank of Australia in Sydney.

On Monday, the Commerce Department said consumer spending after adjusting for inflation fell 0.2 percent in June — the biggest drop since February — as shoppers dealt with higher prices for gasoline, food and other items.

Oil prices also fell as Tropical Storm Edouard seemed less likely to disrupt oil and natural gas output in the Gulf of Mexico. Though Edouard was threatening to pick up strength from warm Gulf waters and gain near-hurricane speeds over the next 24 hours, it likely would not be strong enough to damage offshore oil and natural gas drilling platforms that sit in its path.

Investors ignored continued tension over Iran's nuclear program. Representatives of the five permanent members of the U.N. Security Council and Germany agreed Monday to seek new sanctions against Iran after the country failed to meet a weekend deadline to respond to an offer intended to defuse the dispute, State Department spokesman Gonzalo Gallegos said.

Iran's lack of response to an incentives package aimed at getting it to halt sensitive atomic activity left no option other than to pursue new punitive measures, Gallegos said.

Also Monday, Iran announced that it has tested a new weapon capable of sinking ships nearly 200 miles away, and Tehran reiterated threats to close a strategic waterway at the mouth of the Gulf if attacked. Up to 40 percent of the world's oil passes through the Strait of Hormuz, a narrow passage along Iran's southern coast, and any move by Iran to close it to tanker traffic would send oil prices skyrocketing.

"Sometimes the focus of the market can shift, and at this point it's focused on some of the areas of weakness in demand," Moore said. "But some of the issues that caused oil prices to lift have not yet been resolved."

Analysts at JBC Energy in Vienna, Austria, said the fact that markets where seemingly downplaying bullish factors like Tropical Storm Edouard and the Iran nuclear situation was a sign that "there is significant underlying bearish sentiment at play."

The euro fell to $1.5475 from the $1.5587 it bought late in New York trading Monday, making oil and other commodities less attractive to investors seeking a hedge against inflation and dollar weakness.

In other Nymex trading, heating oil futures fell 5.76 cents to $3.2925 a gallon, while gasoline prices dropped 6.27 cents to $2.9375 a gallon. Natural gas futures shed 27.5 cents to $8.451 per 1,000 cubic feet.

In London, September Brent crude was down $2.33 to $118.35 a barrel on the ICE Futures exchange.

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Enough about me, how are you doing?

keeep going down!!!

I have a sneaking suspicion, probably my imagination, that when the US announced it was considering drilling in Alaska and offshore, it scared the Middle East oil dictators.

("By Allah, we set the price too high. Those Americans will drill. We must come down on the price, to keep our customers!")
.

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-- Paul W. (The Benzadmiral)
('03 Buick Park Avenue, charcoal/cream)
Formerly:
'97 C230, smoke silver/parchment; '86 420SEL, anthracite/light grey; '84 280CE (W123), dark blue/palomino

I wonder if investors (read: speculators) are less willing to bid up prices based on the expectation of ever-increasing prices. Much like the real estate bubble.

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2002 E320 4-Matic
2008 Subaru Outback
2009 Subaru Forester

I'd go with that. One can only guess at how much $$$$ they've made. Now that they see people cutting back, it's time to drop the prices. My neighboring Texaco was down to $4.59 on diesel this morning - lowest in 3+ months but I seriously wonder just how much they'd drop the prices.

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Sharing my partner's 2012 Forte 5dr SX til I find my next 123 or 126..
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Do I miss being a service advisor ???

I never in my life thought I'd be happy that gas was 4.19 a gallon versus 4.39 I remember when it was .25 cents a gallon.

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"It's normal for these things to empty your wallet and break your heart in the process."
2012 SLK 350
1987 420 SEL

I actually filled up with 93 octane in Harrisburg, PA last week for $3.89 a gallon. I was almost doing backflips!

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" We have nothing to fear but the main stream media itself . . . ."- Adapted from Franklin D Roosevelt for the 21st century

OBK #55

1998 Lincoln Continental - Sold
Max 1984 300TD 285,000 miles - Sold
The Dee8gonator 1987 560SEC 196,000 miles - Sold
Orgasmatron - 2006 CLS500 90,000 miles
2002 C320 Wagon 122,000 miles
2016 AMG GTS 12,000 miles

RUG here is 3.75. Premium $4.05. Dropped .04 last night. I think being at the beach and with fewer places to buy it is adding .10-.15 cents a gallon to retail prices in this imemdiate area for the time being.

reg is $3.58 here in places, paid 3.39 with my Kroger fuel card!!!

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1995 Toyota Pickup
2003 Suzuki Burgmann 400
2002 VW Passat 4Motion V6
1957 Aristocraft Torpedo Boat

Geez you're old.. I remember the day my sister picked up her new 77 Vega. It was like $.59 gal. $5 nearly filled the POS.. Hell, 5 years ago when I got my 123, diesel was $1.21 gal. I wish my income went up 300%....

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Sharing my partner's 2012 Forte 5dr SX til I find my next 123 or 126..
-
Do I miss being a service advisor ???

Riiiiiight!

I think it will fall far enough to kill all the alternative energy projects coming online.

I was reading Exxon's 2007 year end report.

They paid about .90 cents per barrel to acquire reserves

"any move by Iran to close it to tanker traffic would send oil prices skyrocketing."

Would also mark the end of Iran as well.

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Thank You!
Fred
2009 ML350
2004 SL600
2004 SL500
1996 SL600
2002 SLK32
2005 CLK320 cabrio
2003 ML350
1997 C280 Sport

I bet it'll never drop below $100/barrel ever again.

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1984 300TD

Two down, one to go.

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Question Authority before it Questions you.