Oil dropped to about $93 per barrel for the first time since February as the European
financial crisis kept investors on edge about the international banking industry and the prospects for global economic growth this year.
Benchmark West Texas Intermediate crude for July delivery lost $1.94, or 2 percent, to settle at $93.01 per barrel on the New York Mercantile Exchange. Oil has retreated about 6 percent this week. In London Brent crude, which is used to price many international oil varieties, declined 81 cents to settle at $113.21 per barrel on the ICE Futures exchange.
“There’s still a case for fairly lofty prices later this year, but right now, there’s not that much confidence that the economic picture will improve,” said Tom Kloza, publisher and chief oil analyst at Oil Price Information Service.
Oil tumbled this week as Greece struggled to generate support for critical financial reforms necessary to continue bailout payments from the European Union. Riots broke out over austerity measures, and credit agencies warned that the country’s financial troubles could mean big banking losses in other countries.
In addition the dollar rose this week as the euro and other currencies fell. That helped push down oil. Crude is priced in U.S. currency and tends to fall as the dollar rises and makes oil more expensive for investors with foreign money.
Oil demand has been falling in the U.S., and the Energy Information Administration said that trend continued this week. EIA said Wednesday that petroleum consumption fell 3.2 percent when compared with levels from a year ago. Wholesale gasoline demand was up 0.5 percent. That was the first increase in weeks.
At the pump retail gasoline prices fell by a penny on Friday to a new national average of $3.675 per gallon, according to AAA, Wright Express and Oil Price Information Service. Gasoline has dropped 25.1 cents in the last month, but it’s still 96.8 cents higher than a year ago.
In other Nymex trading for July contracts, heating oil gave up 2.05 cents to settle at $2.9833 per gallon and gasoline futures lost 0.34 cent to settle at 2.9460 per gallon. Natural gas fell 8.7 cents to settle at $4.325 per 1,000 cubic feet.
Source : news.yahoo.com