Positive global news concerning crude oil and unease in Israel has local Baltimore-area motorists hoping rising gas prices will begin to fall in coming weeks.
A cease-fire involving the militant group Hezbollah and Israel, as well as BP announcing that it could pump more oil at its troubled Alaska pipeline than earlier anticipated, helped send oil prices lower in trading on the New York Mercantile Exchange.
Light sweet crude for September delivery fell $1.40 to $72.95 a barrel in electronic trading on the New York Mercantile Exchange.
“News of the U.N.-negotiated cease-fire in the Middle East and the announcement by BP that the western segment of the Prudhoe Bay field will resume production has buoyed the market,” said Paul J. Harris, an analyst at Bank of Ireland Global Markets in Dublin.
The cease-fire between Israel and the Hezbollah militants took effect early Monday, ending a month of violence that has killed more than 900.
BP PLC announced that it would keep one side of the Prudhoe Bay oil field in Alaska open as it replaces corroded pipes. The move allows BP to get up to half its normal output from the oil field. In an earlier announcement, BP said it would shut down the oil field for an undetermined length of time to fix the pipes.
Towson-based AAA Mid-Atlantic spokeswoman Ragina Averella said she viewed the news as a hopeful positive for gas prices.
“We at AAA are hopeful that these recent developments will lead to consumer gas prices coming down,” Averella said. “However, it is too early to predict when and if consumer gas prices will come down.”
Some analysts said the slide in oil prices may not last.
“I?m not convinced that the drop-off in oil prices is anything more than a correction of the recent uptrend,” said Tom Bentz, an analyst at BNP Paribas Commodity Futures in New York.
The Associated Press contributed to this report.
