Oil slides on economic concerns

NEW YORK (AP) — The price of oil slipped Tuesday after a weak report on U.S. manufacturing suggested demand for oil would fall.

U.S. benchmark crude fell $1.17 to close at $95.30 in New York. Brent crude, which is used by many U.S. refineries to make gasoline, fell $1.60 to $114.18 in London.

The Institute for Supply Management said Tuesday its index of U.S. factory activity fell for the third straight month, suggesting more weakness in the U.S. economy. When economic growth slows, drivers, shippers and travelers use less gasoline, diesel and jet fuel.

Meanwhile, oil production in the Gulf of Mexico is ramping up after Hurricane Isaac, erasing fears that the storm would impact supplies for an extended period and send prices up. The Bureau of Safety and Environmental Enforcement said Tuesday only 3.5 percent of the Gulf of Mexico oil platforms remain evacuated. Production ramped up by about 100,000 barrels per day between Tuesday and Wednesday and is now 710,000 barrels per day below normal. At the height of the storm, 1.3 million barrels per day of production was halted.

Gasoline prices also fell — slightly. The national average retail price of gasoline slipped less than a penny to $3.82 per gallon.

Bigger declines could be on the way, though. Analysts expect gasoline prices to fall in the coming weeks as the refineries return to full strength, the summer driving season ends, and refiners switch to cheaper winter gasoline blends.

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