Has The Oil Bubble Burst? Oil $127/Barrel

Light, sweet crude for August delivery fell US$3.80 at US$127.24 a barrel on the New York Mercantile Exchange. Earlier, the contract dropped as low as US$126.26. In London, September Brent fell US$3.74 to US$128.89 a barrel on the ICE Futures exchange.

The declines offered further evidence that investors who only a week and a half ago drove prices to a new record above US$147 a barrel are now pulling money out of the market. There are also indications that the price of oil is killing demand, especially in the U.S., which consumes far more oil than any other country.

“This is more of the long exit from the market by the hedge funds,” said Jim Ritterbusch, president of energy consultancy Ritterbusch and Associates. “A lot of these investors who have been supporting prices are hitting the road”

Ah the citizens of the world have had their roller coaster ride slow down.

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