Oil prices sank below $61 per barrel today as the government reported unused gasoline held in storage surged yet again. Retail gas prices have fallen every day for more than two weeks.
Energy markets are undergoing an extended sell-off, the longest this year, with new economic reports dampening optimism about any economic recovery.
Benchmark crude for August delivery fell 3.5 percent, or $2.21, to $60.72 a barrel on the New York Mercantile Exchange.
In just over one week, oil prices have fallen more than 17 percent.
“The recession is far from over,” said analyst Stephen Schork. “Perhaps the run-up in prices was a bit overstated.”
Crude prices by last week had more than doubled from lows reached January, when a barrel of crude cost just over $30. That was just six months removed from record highs near $150 per barrel last summer.
Cheap oil sparked a new round of investment, as did a dollar that had been weakened by government efforts to bail out major banks and automakers.
Crude is priced in the dollar, so it effectively becomes cheaper internationally.
Yet dismal economic data continues to emerge and the fundamentals of supply and demand appeared to take control of the market again last week.
International Monetary Fund today lowered its global economic forecast, the latest that would not support high energy prices.
Since peaking at $73.38 last Tuesday, crude futures have fallen by almost $13 per barrel. Gasoline, heating oil and natural gas futures are also tanking. (AP)
