Oil Sinks on EIA Demand Data (Update3)

Updated from 5:13 p.m. EDT

Crude oil prices fell again Tuesday at the New York Mercantile Exchange, pressured by a stronger dollar, a report of falling oil demand and a possible resolution to Russia's military engagement with Georgia.

Trading in oil markets was highly volatile on Tuesday, with West Texas crude futures falling from $114.45 a barrel to well below $113 a barrel overnight Monday and then rebounding Tuesday morning. However, a new monthly report on oil supply and demand levels released midday Tuesday by the Energy Information Administration dealt Tuesday's crude markets a sharp blow, and WTI ultimately settled at $113.01 a barrel.

After-hours trading Tuesday evening has been light. At 8 p.m. EDT, West Texas crude is gaining 20 cents at $113.21 a barrel, natural gas is edging up 4 cents at $8.37 per million British thermal units, and futures for reformulated gasoline and heating oil are both unchanged at $2.84 a gallon and $3.08 a gallon respectively.

Russian President Dmitri Medvedev appeared on Russian state television early Tuesday morning, saying that Russia's military strike against Georgia has been put on hold but could resume immediately if Georgia does not adhere to specified demands.

Medvedev did not say when he will remove Russian troops from Georgian soil. He demanded that Georgian troops first withdraw from their defensive positions and that it sign a "binding agreement on non-use of force."

While Medvedev's foreign minister mentioned at a separate briefing that he thought the relationship between the two countries would likely improve if Georgian President Mikheil Saakashvili were to step down, Russia's president did not mention the issue during his televised speech.