Commodities: Oil slides as Iran tensions ease
Sun 20 Jul 2008

LONDON (SHARECAST) - The price of crude oil fell for the fourth day in succession Friday to its lowest level since 5 June, capping the worst week for “black gold” in more than three years.

Reduced tension between the US and Iran eased fears over future supplies, while the slowdown in the US economy and a rise in inventories also acted as a drag on the oil price.

At the close on Friday on the New York Mercantile Exchange the contract for August delivery had slipped 41 cents to $128.88. The contract is now just under $20 down from its record high on 11 July.

Figures released on Friday by the American Petroleum Institute indicated fuel consumption in the US fell by 3% in the first half of 2008, the heaviest decline in 17 years.

Meanwhile a revival by the US dollar saw demand for the safe haven of gold wane. At one point the yellow metal fell as low as $950.20 an ounce Friday, before recovering to end $12.70 down on the day at $958.

Revived confidence about the future of the mortgage companies Freddie Mac and Fannie Mae and a better than expected set of results from banking giant Citigroup buoyed the dollar and reduced demand for dollar-denominated commodities.

Silver for September delivery dipped $053 to $18.20 an ounce.