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Oil price declines by more than $5
Traders selling to grab profits
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More from BusinessNEW YORK — Oil tumbled more than $5 a barrel Tuesday in its second big drop this week, to levels not seen since June 26, as traders wary about the health of the global economy cashed in gains from oil's recent rally.
Light, sweet crude for August delivery fell $5.33 to settle at $136.04, after earlier slumping as low as $135.14. The decline followed a $3.92 slide on Monday.
The bearish turn erases, at least for the time being, the effect of a rally that pushed prices past $145 in a string of record-setting sessions before the Fourth of July.
Analysts attributed much of the recent sell-off to profit-taking, saying traders were cashing in on the previous week's gains.
A stronger dollar also helped keep prices lower by discouraging investors from pumping more money into commodities.
At the same time, concerns about oil supply disruptions subsided and fears that the economic slowdown is spreading moved to the forefront.
"For the time being it's what we call corrective. ... It's a profit-taking pullback that could still be followed by fresh highs down the road," said Jim Ritterbusch, president of energy consultancy Ritterbusch and Associates.
Ritterbusch said Tuesday's decline may have gained added momentum when computer models used by large investment funds automatically sold oil contracts once prices fell to a preset threshold.
A decline in oil prices wouldn't translate into relief at the gas pump for some time. Retail gasoline prices in the U.S. held steady at a record $4.108 a gallon, according to AAA auto club, the Oil Price Information Service and Wright Express.
Diesel rose more than half a penny to a record $4.807 a gallon.
In Ventura County, the average price for regular unleaded was $4.57 a gallon Tuesday, while diesel was selling for an average of $5.19 a gallon, according to the Automobile Club of Southern California.
Posted by keem_s on July 9, 2008 at 12:09 p.m. (Suggest removal)
I saw an Obama bumper sticker on an SUV today, she was drinking a Starbucks latte and talking on her cellphone while driving 70 mph on the 101.
Posted by keem_s on July 9, 2008 at 12:12 p.m. (Suggest removal)
She blew right past my Honda Accord with the McCain bumber sticker on it in the slow lane doing 60 mph trying to make my $50 worth of gas last the entire week.
Posted by guy133 on July 9, 2008 at 5:10 p.m. (Suggest removal)
Just wait until oil futures crash just like housing, energy and dotcoms did.
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