THE price of oil dropped yesterday on fresh concerns about Europe's economy.
Benchmark West Texas Intermediate crude gave up 77 cents to end at US$103.11 per barrel on the New York Mercantile Exchange. Brent crude, which sets the price for oil imported into the US, lost 5 cents to finish at US$118.71 per barrel in London.
Prices declined after the European Union reported that government debts have risen despite aggressive attempts to slash spending. Separately, a survey of the euro zone's manufacturing and services sectors unexpectedly fell in April.
This can have ripple effects in the global economy. It could cut sales for companies that export to Europe, and it may make it tougher for international banks to lend money. Industrial production in China, a major exporter to Europe, slowed down in March, and it appears to be falling again this month, according to preliminary data released yesterday by HSBC, a London-based investment firm.
Crude has slid from US$110 last month amid investor worries that economic growth in the US and China, the world's two largest oil consumers, may slow more than previously expected.
In the US, retail gasoline prices fell 2.3 cents over the weekend to US$3.86 per gallon (about US$1 a liter), according to auto club AAA, Wright Express and Oil Price Information Service.
Gasoline, on average, now costs about as much as it did a year ago.
Analysts say gasoline should get even cheaper in coming weeks. Futures prices, which are quickly reflected at the pump, have been falling this month. Government data show that money managers, hedge funds, pension funds and other institutional investors have been pulling back on bets that gasoline prices would rise.
"They're taking money off the table," independent analyst and trader Stephen Schork said of gasoline investors. "So prices appear to be headed lower."
Gasoline futures added 4.46 cents to end at US$3.1873 per gallon, but they're still down nearly 7 percent from their peak in March.
In other energy trading, heating oil added less than a penny to finish at US$3.1398 per gallon and natural gas futures added 8 cents to end at US$2.007 per 1,000 cubic feet.
Source:shanghaidaily.com