Oil prices fell sharply, dropping below $124 a barrel, as demand concerns grew and Federal Reserve Chairman Ben Bernanke indicated that more interest-rate cuts are unlikely. Bernanke’s comments sent the dollar higher and raised questions about the chances of oil reaching new highs in the short term.
Light, sweet crude for July delivery fell $3.45 to settle at $124.31 a barrel on the New York Mercantile Exchange. Prices continued falling in after-hours electronic trading, dipping as low as $123.87. It was oil’s lowest trading and settlement levels since May 15. Prices peaked at $135.09 on May 22.
In other Nymex trading, July gasoline futures fell 3.82 cents to settle at $3.3525 a gallon, and July heating oil futures fell 8.24 cents to settle at $3.6396 a gallon.
Natural gas futures rose 25.2 cents to settle at $12.221 per 1,000 cubic feet.