Tags: Oil Prices

Oil Falls Almost 7 Percent but Gas Prices Near $4 Average

Thursday, 05 May 2011 10:11 AM

Oil tumbled nearly 7 percent Thursday on a sharp rise in the dollar and a jump in applications for unemployment benefits.

Benchmark West Texas Intermediate crude for June delivery gave up $7.55 at $101.72 per barrel on the New York Mercantile Exchange. That's the cheapest price for oil since March 10.Oil has dropped more than $10 per barrel, almost 10 percent, since hitting new two-year highs on Monday. Brent crude fell $6.94 to $114.25 on the ICE Futures exchange.

Falling oil prices have not reached gas pumps yet. A gallon of regular is more than a dollar higher than a year ago and is closing in on $4 per gallon. The national average reached $3.985 on Thursday, rising for a 44th consecutive day, according to AAA, Wright Express and Oil Price Information Service.

Industry and government surveys released this week show that Americans are buying less gas as pump prices rise. Investors are increasingly concerned about the impact of higher fuel prices on the American economy.

"Gasoline has certainly put us at a tipping point," analyst and trader Stephen Schork said. "The economy is in a precarious situation. Everyone knows that now."

Oil started falling early in the day, continuing Wednesday's slide, following the Energy Information Administration's report that U.S. oil supplies increased twice as much as expected last week.

The Labor Department said Thursday that the number of people applying for unemployment benefits surged last week to the highest level in eight months. A rise in claims suggests that fewer people are driving to work. That should depress gasoline demand further, analysts say.

The U.S. dollar also jumped versus other major currencies like the euro after the European Central Bank's president declined to signal that interest rates would rise again next month. Oil, which is traded in dollars, tends to fall as the greenback rises and makes crude barrels more expensive for investors holding foreign money.

In other Nymex trading for June contracts, heating oil fell 19 cents to $2.9505 per gallon and gasoline futures lost 17 cents to $3.1542 per gallon. Natural gas gave up 25 cents at $4.391 per 1,000 cubic feet.

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Oil tumbled nearly 7 percent Thursday on a sharp rise in the dollar and a jump in applications for unemployment benefits. Benchmark West Texas Intermediate crude for June delivery gave up $7.55 at $101.72 per barrel on the New York Mercantile Exchange. That's the cheapest...
Oil Prices
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2011-11-05
Thursday, 05 May 2011 10:11 AM
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