Crude oil prices for June dropped to $67.90 a barrel on the New York Mercantile Exchange, the lowest level since September 30th. Ann Koh wrote on yesterday that “crude oil dropped for a seventh day, its longest losing streak in five months, on concern gasoline demand is slowing in the U.S. and as investors delayed buying commodities on speculation the European debt crisis will worsen. Oil slumped to its weakest level in seven months after the euro touched a four-year low earlier today as European nations struggle to meet austerity requirements.”

As the euro continues to weaken, trading at a 14 month low against the dollar and U.K. trade data shows a larger than expected trade deficit. According to The Hightower Report, crude inventories at Cushing, Oklahoma, where New York-traded West Texas Intermediate oil is delivered, rose to a record high last week, according to the Energy Department.

Gordan Kwan, the head of regional energy research at Mirae Asset Securites Ltd. in Hong Kong, was quoted on Bloomberg on Monday, “at best, oil will only bounce back to $70 a barrel, and drift between $70 and $75 until the euro crisis fears have subsided somewhat. Summer demand for gasoline will be positive, so that’s another excuse for a technical bounce for oil prices.”
So where do we see prices going in the future? Keith Kohl, writing in Energy and Capital, does not “see prices remaining below $70 per barrel for much longer,” because, “below a $70 / bbl price tag, new investments simply won’t be as attractive”, despite recent heavy losses.

This blogger sees oil prices rallying, probably climbing up to around $75 per barrel as demand increases to meet summer vacation travel needs. It is likely that it will sustain these levels through the fall, with the potential to fall back down to the $65 range by the beginning of the winter.
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