Oil Falls as Low as $118 on Demand Concerns

August 6, 2008 6:45:21 AM PDT
Oil prices sank as low as $118 a barrel yesterday on the growing belief that a U.S. economic slowdown and high energy costs are curbing consumer demand for gasoline and other petroleum products. The price of crude finished the day down $2.24, settling at $119.17 a barrel.

A day after plunging as much as $5 a barrel in a dramatic sell-off, crude continued its downward trend as traders sold oil contracts on the belief that prices are still too high in relation to demand and have further room to fall.

The dollar's gains against the euro also contributed to oil's decline by making oil and other commodities less attractive to investors seeking a hedge against inflation and dollar weakness.

Crude has now fallen $28, or 19 percent, since reaching a trading high of $147.27 on July 11th.