Oil is down, ending the Tuesday trading session lower after the Federal Reserve said the U.S. economy is recovering at a slower pace than it expected.

Benchmark crude lost $2.01, or 2.5 percent, to finish at $79.30 a barrel. That's the lowest it's been since last September.

The Fed said it will keep its key interest rate "exceptionally low" through mid-2013. The central bank expects the economy to stay weak till then, and that implies oil and gas demand in the U.S. will be less than robust as well.

MasterCard SpendingPulse's weekly retail gasoline survey showed demand down for the 20th straight week. Gas pump prices dropped about a penny on Tuesday, to a national average of $3.65 for a gallon of regular.