Energy Sector Roundup: Crude Futures Sink

Crude Beats a Retreat

Oil prices fell as much as $6 a barrel, sending crude back to levels not seen since June 26 as traders wary about the health of the global economy cashed in gains from oil's recent rally.

A barrel of light, sweet crude for August delivery fell $5.33 on the New York Mercantile Exchange to settle at $136.04.

The market's bearish turn erases, at least for the time being, the effect of a rally that pushed prices past $145 in a string of record-setting sessions before the Fourth of July.

Analysts attributed much of the recent sell-off to profit-taking, saying traders cashed in on the previous week's gains. A stronger dollar also helped keep prices lower by discouraging investors from pumping more money into commodities.

In other Nymex trade, heating oil fell 14.94 cents to settle at $3.8202 a gallon, and gasoline futures sank 11.96 cents to settle at $3.3631 a gallon. Natural gas futures dipped by 60.9 cents to settle at $12.368 per 1,000 cubic feet.

Government Raises Oil and Gas Price Forecasts

The Energy Department raised its outlook for the average price of a barrel of crude and a gallon of gasoline this year.

The Energy Information Administration's Short-Term Energy Outlook now say oil will average $127 a barrel this year, up from the $122 a barrel forecast in last month's report. The EIA expects gasoline to average $3.84 a gallon--more than $1 above the 2007 price. That's up from $3.78 a gallon last month.