Crude oil futures extended losses Tuesday after the Federal Reserve said risks to the economic outlook have increased.
Light, sweet crude continued to retreat on the New York Mercantile Exchange Tuesday settling at $79.30 a barrel, down $2.01. For the first time in nearly 10 months, crude prices settled below $80 a barrel.
The Fed failed to ease fears as Chairman Ben S. Bernanke and his colleagues promised to extend the benchmark interest rate for another two years but stopped short of initiating an additional round of economic stimulus.
In separate monthly reports, the U.S. Energy Information Administration (EIA) and OPEC cut demand forecasts for 2011. The EIA cut its 2011 world demand growth forecast by 60,000 barrels per day (bpd). It raised its 2012 projections to 1.64 MMbpd. Meanwhile, OPEC cut oil demand growth for this year by 150,000 bpd and 20,000 bpd for next year.
The intraday range for crude was $75.71 to $83.05 a barrel.
At its lowest close since Feb. 18, Brent futures lost $1.17 to end Tuesday's trading session at $102.57 a barrel. Prices traded as low as $99.06 and as high as $105.81 Tuesday.
Gasoline for September delivery settled 2.4 cents lower at $2.67 a gallon Tuesday. The EIA reported a 2 percent decline in gasoline demand over the summer-driving season, pushing prices as low as $2.59. The intraday high for gasoline was $2.76.
Conversely, natural gas futures gained 5.9 cents, or 1.5 percent, settling at $3.99 per thousand cubic feet. Natural gas futures pushed past the $4-mark Tuesday, peaking at $4.04 and bottoming out just below $3.89. High temperatures continue to support gains.
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