Oil prices plummet; EIA revises diesel price forecast
NEW YORK -- Crude oil futures fell to almost half of their peak high earlier this summer to below $85 on the New York Mercantile Exchange.
Prices dropped to $84.63 yesterday -- a 12 month low.
In addition to the financial crisis, analysts say another factor in the fall of crude prices were reports from the Energy Information Administration that U.S. gasoline and crude stocks rose sharply last week, as demand continued to slow due to the economic crisis and high fuel costs.
Strong global demand and low surplus production capacity contributed to the run-up to record crude oil prices in July. The current slowdown in economic growth is contributing to the recent decline in oil demand and the sharp decline in prices since July, EIA says. Nonetheless, oil markets are expected to remain relatively tight because of sluggish production growth.
The EIA also said that although oil prices are expected to be up slightly on average next year, on-highway diesel fuel retail prices are projected to average $3.91 per gallon in 2009, down from a projected $4.01 per gallon in 2008.
Just two months ago, it its August report, the EIA was predicting that diesel fuel retail prices would increase to an average of $4.27 per gallon in 2009.
-- via Truckinginfo.com