Oil prices yesterday dropped to a three-month low, to $42.54 a barrel, down 14 percent this week and 24 percent from the its record high six weeks ago.
Fueling the decline in price was the expectation that warm weather in the Northeast in the coming week would cut consumption and raise inventories.
The steep decline this week was the sharpest since the U.S.-led invasion of Iraq in March 2003.
“The scare is over, and that just means the market is going back to where it belongs,” said Ed Silliere, vice president of technical research at Energy Merchant Corp.
“We are more than well supplied, and by that I mean there are not enough buyers for the product that’s out there, for a while,” he said.
On Oct. 25, with inventories low and OPEC threatening to tighten the spigot, oil prices spiked, hitting $55.67 a barrel.
While the price of oil is down in recent weeks, it is still up 37 percent from a year ago, putting the greatest financial pressure on low-income families, chemical manufacturers and the airline industry.
Retailers, too, are feeling the squeeze as shoppers have seen their budgets diverted from shopping.
But that pressure should not worsen in the weeks ahead.
The National Weather Service forecast for Dec. 8 to Dec. 12 is for higher-than-normal temperatures in the eastern half of the country.
“On Monday and Tuesday, New York should be up in the 50s,” said Joel Burgio, a meteorologist with Meteorlogix. That is more than 10 percent higher than the normal 44 degrees.
With Post wire services