Oil Prices Fall to $68 a Barrel, 8-Year Low
Oil prices fell to near $68 a barrel Wednesday in Asia, extending losses to an eight-month low as mixed U.S. crude supply figures failed to stem a two week sell-off.
Benchmark crude for June delivery was down $1.06 to $68.35 a barrel at late afternoon Singapore time in electronic trading on the New York Mercantile Exchange. The contract fell 54 cents to settle at $69.41 on Tuesday.
Oil has plunged more than 20 percent from $87.15 a barrel on May 3 on investor concern that efforts to contain Europe's debt crisis could fail and deep government spending cuts will hurt economic growth and oil demand.
As for how the lower oil prices will affect U.S. gas prices, CBS News correspondent Rebecca Jarvis reports gas prices have dropped by 4.2 cents over the past week to a national average of $2.86 per gallon, according to AAA - which could mean Memorial Day prices could stay beat analyst expectations and stay below $3 a gallon.
Oil inventory data from the American Petroleum Institute late Tuesday was mixed. Crude and distillate supplies fell while gasoline stocks rose. Supplies at the key storage terminal in Cushing Oklahoma rose to a fresh record high.
The Energy Department's Energy Information Administration announced its weekly inventory data report later Wednesday.
"The recent selling pressure that has gripped the oil market continues to hinge on factors external to oil-specific fundamental developments," Barclays Capital said in a report. "Market perceptions over possible developments of the sovereign debt crisis are set to remain an important pricing factor."
Traders are closely watching the euro since oil becomes more expensive for investors holding the European currency as the U.S. dollar strengthens.
The euro rose slightly to $1.2193 on Wednesday after dropping to a fresh four-year low of $1.2146 earlier in the session.
"As long as the euro continues to sink like a rock in water, the price of oil will remain on the defensive," Mike Sander of Sander Capital Advisors said.
In other Nymex trading in June contracts, heating oil fell 1.47 cents to $1.9468 a gallon, and gasoline dropped 2.3 cents to $2.0203 a gallon. Natural gas was down 1.3 cents at $4.329 per 1,000 cubic feet.
In London, Brent crude's July contact was down 56 cents to $73.87 on the ICE futures exchange.
CBS/ AP Benchmark crude for June delivery was down $1.06 to $68.35 a barrel at late afternoon Singapore time in electronic trading on the New York Mercantile Exchange. The contract fell 54 cents to settle at $69.41 on Tuesday.
Oil has plunged more than 20 percent from $87.15 a barrel on May 3 on investor concern that efforts to contain Europe's debt crisis could fail and deep government spending cuts will hurt economic growth and oil demand.
As for how the lower oil prices will affect U.S. gas prices, CBS News correspondent Rebecca Jarvis reports gas prices have dropped by 4.2 cents over the past week to a national average of $2.86 per gallon, according to AAA - which could mean Memorial Day prices could stay beat analyst expectations and stay below $3 a gallon.
Oil inventory data from the American Petroleum Institute late Tuesday was mixed. Crude and distillate supplies fell while gasoline stocks rose. Supplies at the key storage terminal in Cushing Oklahoma rose to a fresh record high.
The Energy Department's Energy Information Administration announced its weekly inventory data report later Wednesday.
"The recent selling pressure that has gripped the oil market continues to hinge on factors external to oil-specific fundamental developments," Barclays Capital said in a report. "Market perceptions over possible developments of the sovereign debt crisis are set to remain an important pricing factor."
Traders are closely watching the euro since oil becomes more expensive for investors holding the European currency as the U.S. dollar strengthens.
The euro rose slightly to $1.2193 on Wednesday after dropping to a fresh four-year low of $1.2146 earlier in the session.
"As long as the euro continues to sink like a rock in water, the price of oil will remain on the defensive," Mike Sander of Sander Capital Advisors said.
In other Nymex trading in June contracts, heating oil fell 1.47 cents to $1.9468 a gallon, and gasoline dropped 2.3 cents to $2.0203 a gallon. Natural gas was down 1.3 cents at $4.329 per 1,000 cubic feet.
In London, Brent crude's July contact was down 56 cents to $73.87 on the ICE futures exchange.
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