Oil dips below $60 as supplies build

The price of crude oil dipped on Wednesday below the $60 US-a-barrel level for the first time since March as supplies of heating oil continued to build. Crude futures for October delivery traded as low as $59.80 US before closing at $60.46 US in New York. Since July, oil prices have fallen by more than 20% as Mideast tensions eased, hurricanes avoided the Gulf of Mexico's oil and gas platforms and the global economy has showed signs of slowing growth.

The rapid and sustained sell-off in energy prices has caught many investors by surprise. A big U.S. hedge fund, Amaranth Advisors, acknowledged this week that it lost billions of dollars recently when its traders bet that natural gas prices would rise. Instead, they hit a two-year low.

Analysts point out that, even at $60 US, oil prices are still high by historical standards.. Many market-watchers say oil will likely drop to somewhere in the 50s before finding a floor. Most do not see a return to $30 US oil.

(2006-09-21 14:33:25 SGT) [Energy] Permalink

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