Oil slides on growing US supply
Wednesday, September 28, 2011
NEW YORK (AP) — Oil dropped Wednesday after the government reported weak fuel demand in the U.S. and an unexpectedly large increase in crude supplies.
Benchmark crude fell 94 cents to $83.51 per barrel in New York, while Brent crude lost $1.02 at $106.12 in London.
Prices had risen sharply earlier this week as Europe appeared to get a better handle on its debt crisis. They fell again as investors turned their attention back to the U.S., the world’s largest petroleum consumer.
The Energy Department reported that gasoline demand last week dropped 2.4 percent from the same time last year. U.S. crude supplies grew by 1.9 million barrels last week, while analysts expected oil supplies to remain unchanged.
Oil has stayed between $79 and $90 a barrel since Aug. 4, as investors have kept a worried eye on weak demand, Europe’s debt crisis and the chances of the U.S. sliding into another recession.
“There’s still a lot of weakness in the U.S.,” said Michael Lynch, president of Strategic Energy & Economic Research.
At the pump, gasoline prices fell 1.4 cents to a national average of $3.465 per gallon on Wednesday.
Prices have dipped below $3 per gallon in some cities, including St. Louis, Mo.
In other energy trading, heating oil was virtually unchanged at $2.8846 per gallon and gasoline futures were down a penny at $2.6252 per gallon. Natural gas fell 4 cents to $3.833 per 1,000 cubic feet.