Oil falls below $121, lowest since May

http://www.reuters.com ^ | Tue Jul 29, 2008 11:44am EDT | By Alex Lawler

[Lucky9teen]

LONDON (Reuters) - Oil fell more than $4 a barrel to below $121 on Tuesday, touching the lowest price since May, as signs of weakening demand outweighed a disruption to Nigerian oil output.

The drop also coincided with a firmer U.S. dollar, which may have reduced the appeal of commodities to some investors, and comments from OPEC's president that oil could fall to $70 or $80 in the long term.

"We still believe that crude's rallies are vulnerable and we would advise not buying into them," said Edward Meir, analyst at MF Global who earlier on Tuesday said he expected an "eventual retreat" to $121-$122.

U.S. crude was down $3.30 at $121.43 a barrel by 11:09 a.m. EDT and traded as low as $120.42, the lowest since May 6. Brent crude was off $3.56 at $122.28.

The president of OPEC, Chakib Khelil, on Tuesday called the current price "abnormal" and said he did not think the producer group should consider cutting output should prices continue to fall as markets were now balanced.

Khelil, who is also Algeria's oil minister, said oil could fall to $70 to $80 in the long term, if the U.S. dollar continued to strengthen and geopolitical concerns eased.

Oil has fallen from a record peak of $147.27 on July 11, pressured by signs that high prices and an economic slowdown are curbing demand especially in the United States, the world's largest oil consumer.

The chief executive of BP Plc Tony Hayward said on Tuesday he saw demand destruction of 5 to 10 percent for gasoline in developed OECD economies, as people drive less due to high fuel prices.

[stlnative]

$3.59 in Southwestern MO on the IL/MO line.
That was yesterday... It is probably even less today.
We have some of the lowest priced gas in the nation.
I think it topped out at $4.09 a few weeks ago.

[stlnative]

$3.53 per gallon in Perryville MO (Perry County MO) on the MO/IL state line.

[redstateconfidential]

http://www.gearvendors.com/