July 13 (Bloomberg) -- Crude oil fell to an eight-week low and gasoline tumbled on skepticism that the economy and fuel consumption will recover this year. Oil futures retreated after Treasury Secretary Timothy Geithner warned that the American economy faces “enormous challenges.” Prices have dropped 20 percent from an eight-month high of $73.38 a barrel on June 30 as U.S. consumer confidence and payrolls fell and fuel stockpiles increased. “There’s been a shift in focus to our comfortable supplies and weak demand,” said Tim Evans, an energy analyst with Citi Futures Perspective in New York. “We got ahead of ourselves and were looking past the recession to a recovery of demand. There’s been no recovery of demand, which has made the market very vulnerable.” Crude oil for August delivery fell $1, or 1.7 percent, to $58.89 a barrel at 10:46 a.m. on the New York Mercantile Exchange. Futures touched $58.32, the lowest since May 18. Prices are down 60 percent from a record $147.27 a barrel reached on July 11, 2008. Gasoline for August delivery slipped 2.45 cents, or 1.5 percent, to $1.626 a gallon in New York. The contract touched $1.601, the lowest since May 6. Pump prices declined along with futures. Regular gasoline, averaged nationwide, slipped 0.8 cent to $2.529 a gallon, AAA, the nation’s biggest motoring organization, said today on its Web site. It was the lowest since June 2. Economic Worries “Prices are probably going to go lower this week because of worries about the economy,” said Phil Flynn, vice president of research at PFGBest, a Chicago-based brokerage. “We have several big economic reports this week and they better come out better than expected. Otherwise, there will be further pressure on oil prices.” The Commerce Department is forecast to report tomorrow that retail sales gained 0.4 percent in June, according to the median of estimates in a Bloomberg News survey. The next day, Federal Reserve figures may show industrial output fell 0.6 percent. An index of producer prices will be released tomorrow and a gauge of consumer prices is due July 15. Brent crude oil for August settlement declined 54 cents, or 0.9 percent, to $59.98 a barrel on London’s ICE Futures Europe exchange. The contract touched $59.49, the lowest since May 26. Henry Okah, the jailed leader of the main militant movement in Nigeria’s oil-rich Niger River delta, will be freed today after he accepted a government amnesty, Wilson Ajuwa, one of his lawyers, said today by phone from the capital, Abuja. MEND Rebellion The Movement for the Emancipation of the Niger Delta, or MEND, made the release of Okah one of its conditions for ending its armed rebellion. Okah was arrested in Angola in September 2007 on suspicion of gun-running and deported to Nigeria in February last year to face a treason trial. Armed attacks targeting oil facilities in the delta region, home to Nigeria’s oil industry, have cut more than 20 percent of the nation’s oil exports since 2006. The West African country has the continent’s largest hydrocarbon reserves and is the fifth-biggest source of U.S. oil imports.

Source