Oil breaks through $60 per barrel

July 10, 8:17 AMEconomy ExaminerCharles Sherry

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(AP Photo/Reed Saxon, File)

The price of oil remains in a downward trend, breaking though $60 per barrel in early action this morning. 

The August contract on the New York Mercantile Exchange traded as low as $59.26 per barrel after the International Energy Agency said it expects no change in demand this year.  An unexpectedly steep decline in consumer sentiment from the University of Michigan's survey also weighed on oil.

Energy traders had hoped for renewed signs that an improving global economy would support oil demand.  The announcement on Tuesday by the Commodity Futures Trading Commission (CFTC) that it is looking at speculative limits on traders may also be taking some of the steam out of the oil market. See CFTC may throttle commodity speculators.

Despite the setback in consumer sentiment, I'm still in the camp that sees a bottom in the economy later in the year followed by a slow rebound, though unemployment appears likely to climb into early 2010. 

But the shift in economic sentiment is providing some help for consumers on the energy front. Moreover, US Treasury yields have eased, having a positive impact on mortgage rates.