Oil prices fell on Friday for a third day, dropping below $US85 a barrel as traders questioned whether Americans were burning enough fuel to justify higher prices. The slump in crude oil wiped out gains from earlier in the week, when prices jumped to an 18-month high above $87 a barrel. The benchmark contract for May delivery lost 47 US cents to settle at $US84.92 a barrel on the New York Mercantile Exchange.
The recent uptick in the US economy had not really increased the country's appetite for energy, with the US still storing more oil than usual. While gasoline demand had increased two per cent since last year, overall petroleum demand, including jet fuel and diesel fuel, has tumbled. The four-week average for US petroleum consumption dropped for the third week in a row to just over 19 million barrels a day.
Oil prices fell even though stock markets rallied and the US dollar fell compared to other major currencies. A weaker US dollar usually props up oil prices since investors holding foreign currencies find they can buy more crude for the same price. In London, Brent crude added two US cents to settle at $US84.83 on the ICE futures exchange.
June gold rose $US9.00 to settle at $US1,161.90 per fine ounce on the COMEX division of the NY Mercantile Exchange. May silver rose 22.4 US cents to settle at $US18.351 per fine ounce. May copper rose 0.35 US cent to settle at $US3.5900 per pound.
