Energy Update: Oil prices drop as nation struggles with economy

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Published: July 3, 2009

Oil prices tumbled to their lowest level in a month Thursday after the release of woeful job numbers in Europe and the U.S. Benchmark crude for August delivery fell $2.58, nearly 4 percent, to settle at $66.73 a barrel on the New York Mercantile Exchange.

Crude hit an eight-month high in midday trading Tuesday, but prices have fallen at the close for five straight days now.

Nymex is closed Friday for the July Fourth holiday. Since the recession began in December 2007, the economy has lost a net total of 6.5 million jobs.

That has destroyed demand for energy on numerous levels. Employees who have lost jobs or are in fear of losing jobs are driving less and buying fewer goods, many of those products are petroleum-based.

Factories also have curbed production and are using less natural gas and electricity. U.S. stores of natural gas continue to grow as energy demand has weakened.

The government reported that the nation’s surplus grew more than expected last week, and it’s now 21 percent above the five-year average.

After rising 41 percent in the second quarter, which ended Tuesday, energy prices have begun to fall.

The Associated Press