Worries about weaker economic growth dragged down oil prices Monday.
Oil has now fallen five of the last six trading days. It fell more than six per cent last week.
Benchmark crude fell 96 cents, or one per cent, to finish at US$91.93 a barrel on the New York Mercantile Exchange. Prices for other petroleum products dropped, too.
In London, Brent crude dropped US$1.61 at US$109.81 a barrel on the ICE Futures exchange.
Germany delivered the latest dose of gloomy economic news, with its index of business confidence falling for the fifth month in a row. Germany is an economic powerhouse, but 43 per cent of its exports go to its euro partners. And growth is stalling across the other 16 countries in the Eurozone.
Slower economies mean less demand for oil, pushing prices down.
Phil Flynn, a senior market analyst for Price Futures Group, said he’s surprised prices haven’t fallen further. He said one reason could be that commodity funds have not been bailing out of oil.
demand destruction
Still, oil prices have been under pressure from worries about Europe. The dollar has been stronger, which makes oil cheaper for holders of other currencies.
“You’re seeing demand destruction around the globe,” he said. “You’ve got Saudi Arabia saying they’re going to pump oil until the cows come home.” All of that drives down oil prices, he said.
Heating oil dropped 2.2 cents to US$3.0987 per gallon, wholesale gasolene decreased 2.49 cents to US$2.9176 per gallon and natural gas ended down 4.8 cents to US$2.837 per 1,000 cubic feet.
– AP
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