NEW YORK -- Oil prices fell more than 3 U.S. dollars Tuesday on a strengthening dollar and lower forecasts for global oil consumption.
Light, sweet crude for July delivery fell 3.04 dollars to settle at 131.31 dollars a barrel on the New York Mercantile Exchange.
The dollar gained against the euro and other major currencies Tuesday, prompting traders who had bought commodities as a hedge against inflation to sell crude futures.
Both the International Energy Agency (IEA) and the U.S. Energy Department lowered their forecasts for oil consumption, prompting concerns that high oil prices would cut demand. The IEA said in its monthly report that global demand for petroleum products will grow by 800,000 barrels a day in 2008, which is down from the 1 million barrels a day earlier this year. The U.S. Energy Department also predicted that oil consumption will fall by 240,000 barrels a day in 2008. In the department's last month report, it forecasted consumption to be unchanged from 2007.
Meanwhile, Saudi Arabia is reported to have increased oil output by 500,000 barrels a day this quarter, which is 200,000 barrels more than previously thought. Saudi Arabia Monday called for a meeting between oil producing countries and consumption countries to discuss the soaring oil prices.
In London, Brent crude for July delivery fell 2.89 dollars to settle at 131.02 dollars a barrel on the ICE Futures Exchange.
Light, sweet crude for July delivery fell 3.04 dollars to settle at 131.31 dollars a barrel on the New York Mercantile Exchange.
The dollar gained against the euro and other major currencies Tuesday, prompting traders who had bought commodities as a hedge against inflation to sell crude futures.
Both the International Energy Agency (IEA) and the U.S. Energy Department lowered their forecasts for oil consumption, prompting concerns that high oil prices would cut demand. The IEA said in its monthly report that global demand for petroleum products will grow by 800,000 barrels a day in 2008, which is down from the 1 million barrels a day earlier this year. The U.S. Energy Department also predicted that oil consumption will fall by 240,000 barrels a day in 2008. In the department's last month report, it forecasted consumption to be unchanged from 2007.
Meanwhile, Saudi Arabia is reported to have increased oil output by 500,000 barrels a day this quarter, which is 200,000 barrels more than previously thought. Saudi Arabia Monday called for a meeting between oil producing countries and consumption countries to discuss the soaring oil prices.
In London, Brent crude for July delivery fell 2.89 dollars to settle at 131.02 dollars a barrel on the ICE Futures Exchange.
