Oil prices dip after reaching record high

| Thursday, July 06, 2006

Oil prices fell slightly on Thursday, July 6 after reaching a record closing high of $75.19 per barrel on Wednesday, July 7.

Light, sweet crude was trading at $74.80 per barrel by midday July 6 on the New York Mercantile Exchange.

Forbes reported that a low inventory report from the Department of Energy combined with unease over nuclear testing in North Korea helped push the price to its record level.

Some analysts doubted the North Korea factor, however. One told Forbes that traders were simply using the situation there as an excuse to drive up prices and that North Korea would have “no immediate impact on crude supply and demand as it’s not a producer or a major consumer of oil products.”

Meanwhile, the Energy Department said in its weekly report that crude oil inventories are down by 2.4 million barrels to 342.3 million barrels. However, that is still 3.6 percent higher than levels for the same time period in 2005.

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