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HOUSTON -- While oil prices have fallen for two straight days, earlier this week, energy analysts are apprehensive to forecast further drops as the market remains volatile.
On close of business Tuesday, oil traded $136.04 a barrel, which marks an almost $9 dollar decrease from last week. Analysts told The New York Times that a strengthening of the U.S. dollar in recent days as well as the reduced threat of hurricane Bertha are contributing variables.
While oil has lost more than 6 percent of its value since the Fourth of July weekend, consumers have not realized savings, with the average price holding at $4.11, which is roughly 10 cents more than a month ago and $1.14 more than a year ago.
MasterCard reported earlier this week that motorists curbed gas consumption rates leading up to and including the July 4 holiday weekend by nearly 4 percent from the year before. This marked the 21st consecutive week of lower gasoline consumption in comparison with last year.
"I don't think there has been any change in the overall direction of the oil market," Addison Armstrong, director of market research at Tradition Energy, an energy broker that deals with banks and hedge funds, told The New York Times. "The bias is still clearly to the upside, with $150 firmly in the sights of traders."
Chip Johnson, president and chief executive of the Houston-based Carrizo Oil and Gas, told the paper he was "confused" by "such wild swings," adding "I can't see oil getting cheap again ever. It's just too hard to find, and too many people want to use it."
Johnson's stance was supported yesterday with news of Iran launching test missiles in the region, which offset the market and raised trading prices. Despite President Mahmoud Ahmadinejad dismissing the possibility of war with the United States and Israel, the unscheduled tests sent waves of uncertainty throughout the region and on to the floor of the New York Stock Exchange.