Tags: Oil | Prices | crude

Oil Drops 3 Percent on Fears About Ireland, Asia

Tuesday, 16 Nov 2010 03:37 PM

Oil prices fell again as investors took profits amid renewed concerns about the global economy. A three-day decline has erased most of the gains for the month of November.

Benchmark oil for December delivery fell $2.52, or 3 percent, to $82.34 a barrel Tuesday on the New York Mercantile Exchange as traders considered Ireland's ongoing debt problems and worries about higher inflation in Asia.

Meanwhile, pump prices inched higher overnight to a national average of $2.893 a gallon for unleaded regular gasoline, according to AAA, Wright Express and Oil Price Information Service. The price is about 6 cents higher than it was a month ago and 26 cents more than a year ago.

Oil prices have fallen 6.1 percent since Thursday, when speculation arose that China would take steps to control its economic growth. On Tuesday, South Korea's central bank raised interest rates to curb growing inflation. Add in some concern about Ireland's impact on Europe's economic recovery and investors found good reason to secure some recent profits.

As of Thursday, oil had risen 7 percent for the month and 23 percent from the end of August, hitting a two-year high above $88 along the way.

In the U.S., the Labor Department said retail gas prices jumped 9.8 percent in October, and diesel and home heating oil costs also rose, contributing to a 0.4 percent increase in the Producer Price Index. Yet, there was little sign of inflation as the cost of food, cars and computers fell.

Excluding the volatile food and energy categories, the so-called core index fell by 0.6 percent, the most in more than four years, primarily because of lower prices for new cars and trucks.

While inflation remains low, the report supports the Federal Reserve's belief that it's because economic growth in the U.S. remains sluggish. That view prompted the Fed's multi-billion bond-buying program in an effort to push interest rates lower and help stimulate the economy.

"The economic bad news has been sort of giving us water torture, you know, a drip from Ireland, a drip from China, a drip off from producer prices," said Michael Lynch, president of Strategic Energy & Economic Research. "It's making people feel like the run-up in oil prices was overdone."

In other Nymex trading in December contracts, heating oil fell 6.19 cents to $2.3090 a gallon, gasoline lost 2.93 cents to $2.1657 a gallon and natural gas fell 2.7 cents to $3.818 per 1,000 cubic feet.

In London, Brent crude gave up $1.45 cents to $85.25 a barrel on the ICE Futures exchange.

© Copyright 2017 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

1Like our page
2Share
Markets
Oil prices fell again as investors took profits amid renewed concerns about the global economy. A three-day decline has erased most of the gains for the month of November. Benchmark oil for December delivery fell $2.52, or 3 percent, to $82.34 a barrel Tuesday on the New...
Oil,Prices,crude
424
2010-37-16
 

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved