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Oil prices tumble in volatile trading

Oil prices tumble in volatile trading

Oil prices tumbled in volatile trading Tuesday after rising to an eight-month high.
Benchmark crude for August delivery fell $2.25, more than 3 percent, to $69.24 a barrel on the New York Mercantile Exchange after swinging between $69.03 and $73.38 in early trading.
It has been an extraordinarily volatile year, which began with crude prices near $40 per barrel, less than a third of what a barrel cost in July, before going on an extended rally for the past two months as the second quarter comes to a close.
"It's a lot of the same stuff," said Peter Beutel of Cameron Hanover, blaming huge investments by fund managers into the energy market. The influx of money has driven oil prices in the opposite direction of the dollar with major investors seeking a hedge against inflation.
"The market is not being allowed to express the supply and demand issues and that has been the problem on and off for the past two years," he said.
Oil closed 2008 at $44.60 after falling from $147 nearly a year ago. Crude then surged from below $35 in March in part on investor concern that massive U.S. fiscal stimulus spending will eventually spark high inflation. Investors often buy commodities such as crude as a hedge against a weakening dollar and inflation.
Beutel said he can see oil falling back to $55 a barrel during the next three months, maybe even lower.
In other Nymex trading, gasoline for July delivery fell 4.2 cents to $1.8937 a gallon and heating oil fell 6 cents to $1.724. Natural gas for July delivery fell 9 cents to $3.856 per 1,000 cubic feet.
In London, Brent prices tumbled $2.25 to $68.74 a barrel on the ICE Futures exchange. Earlier in the session, Brent peaked at $73.50.
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Associated Press writers Pablo Gorondi in Budapest, Hungary, and Alex Kennedy in Singapore contributed to this report.


Updated : 2021-06-21 02:38 GMT+08:00