Oil Stages Late-Day Rally
NEW YORK --- U.S. crude for September delivery climbed $1.47 to settle at $124.73 a barrel today on the New York Mercantile Exchange, after investors weighed signs of mounting geopolitical tensions in oil-supplying countries.
According to CNNMoney.com, concerns over Iran's nuclear ambitions and rebel attacks in Nigeria continue to have an impact on trading. On Saturday, Iranian President Mahmoud Ahmadinejad said that the country operates twice the number of uranium-enriching machines as previously announced.
Early Monday, the Nigerian rebel group known as Movement for the Emancipation of the Niger Delta claimed credit for destroying some Shell oil pipelines in the southern part of the country.
"If we lose much oil in Nigeria, it quickly takes away any sort of cushion we have in the overall picture," Neal Dingmann, senior energy analyst at Dahlman Rose & Co., told CNNMoney.com.
However, most investment funds that buy oil are predicting an overall drop in oil prices as consumer demand continues to decline. Earlier this month, oil prices reached record highs above $147 a barrel. More recently, prices have fallen more than $22. Consumers are simply cutting back on their driving in response to higher gasoline and food prices.
According to the Energy Department, U.S. gasoline demand has dropped 2.4 percent from the same period last year. The Transportation Department reports that Americans drove 9.6 billion fewer miles in May compared to the same time last year.