Crude futures plummeted to their biggest drop in almost 11 months as forecasters declared a decrease in oil demand Tuesday.
May oil futures fell for a second day, settling at $106.25 a barrel Tuesday. The $3.67-decline came after investment bank Goldman Sachs released its research report. Known for its bullish price forecasts, Goldman Sachs warned that oil prices called for a "substantial pullback," having already maxed out its second-quarter forecasts.
Also pressuring prices were warnings from the International Energy Agency (IEA) and the Organization of the Petroleum Exporting Countries (OPEC) of higher prices beginning to dent demand growth.
Despite the increase in Japan's demand and the production lost in Libya, analysts claim an adequate global supply. Likewise, Saudi Arabia recently reduced 500,000 barrels a day due to moderate demand.
Light, sweet crude traded between $105.47 and $110.24 Tuesday.
Gasoline for May delivery also traded lower on Tuesday. At $3.16 a gallon, traders believe consumers are starting to drive less. Traditionally, Memorial Day weekend marks the beginning of the summer driving season. Analysts look forward to the summer, once vacationers start driving and gasoline prices increase.
The intraday range for gasoline was $4.06 to $4.15 a gallon.
Natural gas futures fell a penny to settle at $4.098 per thousand cubic feet, after fluctuating between $3.13 and $3.23 Tuesday.
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