Crude prices retreated Tuesday in response to a looser US ethanol requirement for gasoline and easing market worries over a possible Al-Qaeda attack in the oil-rich Middle East.
Prices of US benchmark West Texas Intermediate crude for September delivery fell $1.26 to $105.30 a barrel on the New York Mercantile Exchange.
The European benchmark Brent oil for delivery in September dropped 52 cents to $108.18 a barrel.
Analysts said Tuesday’s lower crude price was sparked by a fall in prices for gasoline, which came after the US Environmental Protection Agency announced that it was loosening a requirement on the use of some types of ethanol in gas blends in 2014.
That drop had a knock-on effect on oil, said John Kilduff, trader at Again Capital.
“Gasoline basically led us lower,” Kilduff said.
“The EPA statement has put the pressure on the market,” said Carl Larry, analyst at Oil Outlooks and Opinions.
Analysts said oil also experienced downward pressure from news that some Libyan oil exports had resumed and that production on the North Sea Buzzard oilfield had come back online after five days of maintenance.
In addition, market worries over a possible Al Qaeda attack eased after days without incident since the US ordered its missions across the Middle East and North Africa closed due to a detected threat.
On Tuesday the US and its allies evacuated diplomats from Yemen out of fear of an imminent attack.
“Every day that goes by with relative calm, we should drive lower,” Kilduff said of the oil market.
Source: AFP
