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Crude-oil futures fell under $71 a barrel Thursday (Aug. 17) to trade at a two-month low, supported by continued output from the Prudhoe Bay oil field in Alaska despite major repairs and easing concerns over violence in the Middle East.
CBS MarketWatch reported that crude for September delivery was last down $1.34 at $70.55 a barrel on the New York Mercantile Exchange, after touching $70.50, its lowest intraday level since June 21. The contract took a knock on Wednesday as traders digested the weekly supply data and a reduced oil demand growth forecast from the Organization of the Petroleum Exporting Countries.
Among the oil products, September unleaded gasoline was down 4.56 cents at $1.9325 a gallon and September heating oil fell 2.99 cents at $1.987 a gallon.
“With the energy complex continuing to slide in the wake of clearly bullish weekly inventory data yesterday, it is clear that more speculative premium is being extracted from prices,” said Michael Fitzpatrick, an analyst at Fimat USA.
BP said Wednesday that it would be able to get some Alaskan oil flow back on line by the end of the month and part of the Prudhoe Bay oil field was already down for maintenance before the pipeline leak was discovered earlier this month, he said.
And while U.S. crude supplies fell 1.6 million barrels for the week ended Aug. 11, according to the Energy Department report Wednesday, they are still 14 million barrels above the year-ago stock levels, Fitzpatrick pointed out.
Oil has fallen around 5% since the close of $74.35 on Aug. 11 as traders moved to unwind the terror premium built into prices during the recent conflict between Israel and the Hezbollah group in Lebanon.
Lebanon’s army is now moving into the southern part of the country, much of which is still under the control of Israeli troops. Israel has given up some of its positions to the United Nations force sent in as part of a cease-fire struck with Hezbollah over the weekend.