Oil prices eased further Tuesday as the head of OPEC said there was plenty of crude on the market and U.S. gasoline demand passed its summer peak with the close of the Labor Day holiday. Traders are also switching their focus to heating fuels ahead of winter in the northern hemisphere. U.S. light crude for October delivery fell 96 cents to $43.03 a barrel, in the first day of trading on the New York Mercantile Exchange following the three-day Labor Day weekend holiday. London Brent crude fell 20 cents to $40.42 a barrel, following a 61-cent drop on Monday. Brent prices now stand nearly five dollars below the $45.15 record high hit last month. "The drop in prices is long overdue," said Fadel Gheit, an oil analyst with Oppenheimer. "Speculators pushed the prices beyond even the most bullish estimates, because they exaggerated (supply shortage fears), but now I think we see the party's over." OPEC President Purnomo Yusgiantoro said in Sydney that global markets now see a crude oil oversupply of about 1.5 million barrels per day (bpd), informs CNNMoney. The Herald Sun publishes that OPEC will consider raising its average price band at a meeting next week, but has forecast crude prices to fall by up to a third once elections in the US and Iraq are completed. OPEC president Purnomo Yusgiantoro, in Sydney for the World Energy Congress, said crude oil prices could fall to around $US30 a barrel. Yesterday crude oil for October delivery fell as much as $US1.02, or 2.3 percent, to $US42.97 a barrel in electronic trading on the New York Mercantile Exchange. World oil prices are weakening after Dr Purnomo said the organisation might have spare capacity of more than 1.5 million barrels a day. He said OPEC's forecasts showed the world market had enough oil and production capability was 1.5 million barrels above demand. "At $US45 to $US50, the world is still okay, but money is strong so far ... and the world does not hurt much," Dr Purnomo said, noting the international crude oil price was in decline.
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