Oil slides on demand worries

Crude prices continue to decline amid concerns that demand will wane.

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By Hibah Yousuf, CNNMoney.com contributing writer

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NEW YORK (CNNMoney.com) -- Oil prices dipped lower Tuesday as investors took a breather from concern over the Iranian nuclear program and revisited their worries about weak oil demand.

Crude oil for November delivery fell 13 cents and settled at $66.71 per barrel.

Oil prices climbed Monday following a spike in equities and concern over the Iranian uranium enrichment facility and test-fires of two types of long range missiles.

Investors have returned to worries about decreasing oil demand. And entering into the softest demand season of the year, prices are set to plunge downward, especially as the dollar regains strength.

What the experts have to say. "Cooler heads are prevailing on the Iranian situation. Even if we get into a heated discussion with Iran, a disruption in oil supplies is unlikely," said Phil Flynn, senior market analyst at PFG Best.

"The demand for oil last July was the lowest it's been in 13 years, and even though demand has improved since the depth of the crisis, we're still well below where we were a year ago," Flynn said.

"I'm bearish going into the end of the year," Flynn said. "The bulls have controlled the market for a long time, but they will have to make a compelling case to justify oil prices at this high level," adding that unless the dollar drops dramatically, the oil market will continue to be under pressure and be impacted by "good old fashioned supply and demand."

As stimulus funds ease, the dollar gains ground and the economy stabilizes, Flynn expects to see crude oil continue its downward trend, potentially into the $50-per-barrel range, or even lower into the $30-per-barrel range on positive economic data.

"I think we're at a low for the dollar for the year, and that means we've see the high for oil for the year," he said.

Gasoline prices. The national average price for a gallon of regular unleaded gas decreased to $2.487, down 1.2 cents from the previous day's $2.499, according to motorist group AAA.

This is the eighth consecutive day the price of gas has declined. To top of page

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