Oil price lower after 4-day rise
Wednesday, February 22, 2012
NEW YORK (AP) — A four-day rise in oil prices stalled Wednesday following a weak report on Chinese manufacturing and lingering concerns about Greece’s bailout.
The price of West Texas Intermediate, the benchmark for oils produced in the U.S., fell 46 cents to $105.79 a barrel.
WTI had climbed 5 percent over the last four trading days as tensions escalated between the West and Iran, the world’s third-biggest oil exporter. The West is worried that Iran is using its nuclear program to build a weapon, a claim that Iran denies. Traders fear that any military action to stop the program could disrupt oil shipments. That helped push prices up in recent days.
U.S., retail gasoline prices rose nearly a penny to a national average of $3.58 per gallon, according to AAA, Wright Express and Oil Price Information Service. Gasoline is at the highest price ever for this time of year, and analysts say the national average could hit $4.25 per gallon by late April.
U.S. motorists have bought less gasoline every week for the past 48 weeks, according to a survey published Wednesday by MasterCard SpendingPulse. At the same time, prices have risen. Those trends should continue, say industry analysts.
• DEMAND DOWN: The four-week average for gasoline demand dropped by 5.7 percent when compared with the same period last year, according to MasterCard SpendingPulse. Americans are driving less and car engines are slightly more efficient.
• LONG-TERM DECLINE: The survey, based on credit card receipts from service stations around the country, showed average gasoline demand has dropped every week from March 25, 2011, to Feb. 17, 2012.
• GAS PRICE PARADOX: A sustained drop in demand usually pushes prices lower. But gasoline is a little different. It is primarily influenced by the price of crude oil, which refineries use to make gasoline and other fuels. Oil prices have been climbing since last year thanks to rising demand from China and other emerging nations. Last year’s Arab spring and growing tensions over Iran’s nuclear program also raised concerns about the security of oil supplies. Gasoline prices now average $3.579 per gallon in the U.S., up 40.8 cents from the same time last year. Pump prices are expected to peak at about $4.25 a gallon this spring.