Oil prices fell by more than US$1 a barrel on Friday and analysts said ample global supplies at a time of year when demand is weak could prompt more selling -- at least until winter heating demand kicks in.
Concerns about slowing economic growth in the US and receding fears about this year's Atlantic hurricane season have also helped to send oil prices into a downward spiral of 23 percent since the middle of July.
The price of oil fell 4 percent just this week. Still, the possibility of a production cut by OPEC has prompted some buying in recent days among bargain hunters who believe oil is fairly priced at around US$60 a barrel. But many traders say it is only a matter of time before crude futures fall below that key psychological threshold.
Light sweet crude for November delivery fell US$1.04 to settle at US$60.55 a barrel on the New York Mercantile Exchange. November Brent crude on London's ICE futures exchange declined US$0.93 to settle at US$60.41 a barrel.
NYMEX futures prices also declined for gasoline, heating oil and natural gas, which finished at a new two-year low.
Houston-based oil consultant Dan Lippe of Petral Worldwide said that with worldwide supplies growing, he wouldn't be surprised to see oil back below US$50 a barrel, and perhaps as low as US$40, within a few years -- if not sooner.
An unexpected supply shock, of course, could drive oil prices right back above US$70, he said.
Crude oil futures have plummeted from a July 14 intraday peak of US$78.40 a barrel as worries ease about supply threats from Iran and Nigeria, and as the signs of economic weakness in the US point to a possible softening in demand for energy.
"We already took US$5 out of the oil price because of geopolitics and we're probably going to take out another US$5," Liberty Trading president James Cordier said.
"If we have a mild winter," Cordier added, "all of the fund money that pushed crude up toward US$80 a barrel is going to get out of the market."
OPEC recently reduced its demand forecast for the remainder of the year, citing weakening demand in the US, among other factors, and some cartel members have insinuated that oil prices below US$60 could prompt talk of a production cut.
NYMEX natural gas futures fell US$0.154 to settle at US$4.627 per 1,000 cubic feet (US$0.1634 per cubic meter) -- the lowest close since Sept. 10, 2004. Gasoline futures slid US$0.0282 to settle at US$1.4712 per gallon (US$0.3886 per liter). Heating oil futures declined US$0.0316 cents to settle at US$1.6472 a gallon (US$0.4351 per liter).
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