Commodity Daily News

Oil Prices See Small Drop in Response to Crippling Demand in Black Gold.

Oil prices retreated Thursday, reversing earlier gains, on worries that a weakening U.S. economy could cripple demand. The US Gasoline Demand was down 2.1% in the first seven months of the year as record prices and slower economic growth cut consumer spending. As a result, U.S. Crude for September delivery fell $1.99 to settle at $114.01 a barrel on the New York Mercantile Exchange yesterday.
Concern about slowing demand weighed on Oil after two reports pointed to further economic weakness in the United States, the world's largest oil consumer.
Oil prices were also affected by the Europe's economy contraction; spurring speculation that the slowdown in fuel consumption will spread beyond the U.S. As latest reports show, Europe's economy contracted for the first time since the introduction of the EUR almost a decade ago.

However, Crude Oil prices may rise next week as U.S. gasoline inventories fall because refineries are cutting output in response to low profit margins.