<div class="articleHeader">     <div class="articleTitle"><strong>Bears Scratch Oil Prices Down Near $60</strong></div>     	<div class="articleSubText"><div class="articleDate"><div class="articleAuthor"><strong>by &nbsp;Rigzone Staff</strong></div><div class="articleSubdivider"><strong>|</strong></div><strong>Wednesday, July 08, 2009</strong></div></div>  	   </div><!-- END: Toolbar -->  	 	 	 	 	 	 	<p>Oil prices continued their week-long free fall, closing just above $60 on the New York Mercantile Exchange Wednesday. After an EIA report revealed that distillate and gasoline inventories in the United States had climbed again this week, the crude market tumbled further.</p> <p>Crude oil settled on the NYMEX Wednesday nearly $3 lower than yesterday's close, at $60.14 a barrel. This is more than a $10 drop since the year's high of near $73 in mid-June.</p> <p>Contributing to the sell-off, the EIA reported today that both distillate and gasoline inventories had risen, despite the recent US holiday weekend.</p> <p>&quot;We had a rather neutral to fairly bearish EIA stocks report, especially in the products, where the distillates and gasoline inventories were really double expectations,&quot; said Mike Zarembski, a senior commodities analyst with optionsXpress in Chicago. &quot;The combination of the rejection of the commodity markets, plus the EIA reports really caused oil to tumble.&quot;</p> <p>The analyst believes that the commodity market is mirroring the decline in the stock market and that investors are wary to put their money in the pot at all.</p> <p>&quot;It was just more continuation of the sell-off that we've seen the past several sessions,&quot; explained Zarembski. &quot;The stock market started to turn weaker lately, and that's gotten people in the selling mode, in the whole commodity complex as well; and today was no exception.&quot;</p> <p>He believes that investors are going to wait to see if the US stimulus package actually has a positive effect on the economy.</p> <p>&quot;It seems like a lot of people are starting to say, &lsquo;Enough is enough. Let's go to the sidelines here and wait this out the next few months,'&quot; he concluded.</p> <h2>The New Floor</h2> <p>While hope existed a few weeks ago that oil might reach $75, the new price point for oil has dropped drastically. Seeing $60 so quickly in the decent, the new floor for oil may be even lower.</p> <p>&quot;I wouldn't be surprised if we hit just below $60, but I wouldn't be surprised if we get a little bit of a short-covering bounce below that,&quot; Zarembski predicted. &quot;Because any time you move $10 or so in this oil market, it's due for a little bit of a correction even in the short-term.&quot;</p> <p>Notwithstanding any major increase in demand, a true cut in production from OPEC, severe political tensions in the Middle East or a seasonal production interruption from a hurricane in the Gulf of Mexico, the price of oil should remain below $60 for the foreseeable future.</p> &quot;I would say a run below $60 is going to find a little buying here, and we're going to have to wait and see if that's sustainable or not.&quot;<br /><br /><a href="http://www.rigzone.com/news/article.asp?a_id=78055" target="_blank">Article provided by Rigzone.com - click here for the articles link</a>