Oil price falls on concerns about global economy
NEW YORK (AP) — Oil prices fell Wednesday on concerns about a weakening European economy and disappointing job growth in the U.S.
Benchmark West Texas Intermediate crude gave up 94 cents to end the day at $105.22 per barrel in New York. Brent crude, which helps set the price of oil imported into the U.S., lost $1.46 to finish at $118.20 per barrel in London.
Prices dropped after a survey showed that Europe's manufacturing industry is slowing down. Also, the unemployment rate in the 17 countries that use the euro rose to 10.9 percent in March. A separate report says U.S. businesses added 119,000 jobs in April, far lower than the 201,000 added in March.
Oil and natural gas demand has been declining this year in the U.S. and Europe, and it could fall further if their economies struggle. The U.S. is the world's largest oil consumer. Europe uses nearly a fifth of the world's oil.
Wednesday's reports out of Europe and the U.S. show "the economic picture remains uncertain," said Gene McGillian, a broker and oil analyst at Tradition Energy. "The European debt crisis is still ongoing, and while the U.S. appears to be improving, it's really just muddling forward," he said.
The Energy Department's Energy Information Administration also reported on Wednesday that U.S. oil supplies grew slightly more than expected last week, while demand fell nearly 2 percent. The nation's crude inventories increased by 2.8 million barrels from the previous week, to 375.9 million barrels in storage. At the same time, gasoline supplies dropped by 2 million barrels.
The EIA report said wholesale demand for gasoline was down almost 5 percent from a year ago, as many drivers continue to be careful about how much they drive.
Retail U.S. gasoline prices fell by less than a penny on Wednesday to a national average of $3.80 per gallon, according to AAA, Wright Express and Oil Price Information service. That's about 12 cents lower than a month ago, but the average is still above $4 a gallon in seven states and the District of Columbia.
In other energy futures trading, natural gas fell nearly 5 percent after jumping on Tuesday to the highest level in two months. Futures fell 11.8 cents to finish at $2.253 per 1,000 cubic feet.
Heating oil fell by 3.46 cents to end at $3.1425 per gallon and gasoline fell by 2.14 cents to end at $3.0757 a gallon.
Follow Chris Kahn on Twitter at http://twitter.com/ChrisKahnAP