Oil and other energy prices fall

NEW YORK: Benchmark crude for July delivery dropped US$1.82 on Friday on the New York Mercantile Exchange to settle at US$69.55 a barrel.

The August contract fell $1.89 to settle at $70.02 a barrel.

The slump in crude came as gasoline markets showed the first signs this week that an extended rally in pump prices is nearing an end after 52 straight days of price increases.

Gasoline for July delivery fell Friday by 10.5 cents, more than 5 percent, to settle at $1.9244 a gallon.

Crude prices have doubled their value in three months, hitting a high for the year of $73.23 a barrel last week.

Money has poured into oil markets as the dollar weakened against the euro.

While demand for energy remains weak, oil markets are attracting a lot of attention because crude can be used as a hedge against inflation.

Meanwhile, retail gas prices added a half cent overnight to a new national average of $2.69 a gallon, according to auto club AAA, Wright Express and Oil Price Information Service.

Pump prices could remain near the current level through the Fourth of July weekend.

"Gas prices should back off a bit after that," said Phil Flynn, an analyst at Alaron Trading Corp.

"However, you still have a wild card with oil. If crude keeps driving higher, then gas will too."

For the first time in months, geopolitical events are also beginning to at least get some attention in oil markets.

In Nigeria, Africa's largest crude producer, a militant group said it blew up a major pipeline run by Italian oil company Agip.

Violence has been escalating in the oil-rich southern region as the military intensifies operations to flush out rebels battling for a larger share of the Nigeria's oil revenues.

In Iran, protesters loyal to presidential candidate Mir Hossein Mousavi have been staging massive street rallies to protest what they believe to be a rigged election.

However, because of the recession, there's so much extra oil production capacity around the world that experts say a drop in Iranian or Nigerian exports won't lead to any price spikes.

In other Nymex trading, heating oil dropped 5.03 cents to settle at $1.7867 a gallon, and natural gas for July delivery lost 6.1 cents to settle at $4.032 per 1,000 cubic feet.

In London, Brent prices lost $1.87 to settle at $69.19 a barrel on the ICE Futures exchange.