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Tags: Oil Prices

Oil Price Drops Below $80 for 1st Time Since October

Thursday, 21 June 2012 12:56 PM EDT

The price of oil Thursday sank below $80 a barrel for the first time since October on growing concerns about the global economy.

On the New York Mercantile Exchange, crude dropped by $3.25 to finish at $78.20 per barrel. 

Prices have been falling as the world economy slows. America isn't creating as many jobs as hoped earlier this year, Europe faces another recession and manufacturing activity in China appears to have slowed.

On Thursday, reports out of China and the U.S. both pointed to a slowdown in manufacturing activity. Platts, the energy-information arm of McGraw-Hill Cos. also noted that China's oil demand rose less than 1 percent in May, the second-smallest increase this year.

Meanwhile analysts say investors are disappointed that the Federal Reserve didn't announce more aggressive moves to stimulate the economy after its meeting this week. The Fed will extend an existing program to lower long-term interest rates, but it doesn't plan to pump more money into the economy as it has previously.

The drop in oil prices has made gasoline cheaper this summer. The pump price fell to a national average of $3.472 per gallon Thursday, according to AAA, Wright Express and Oil Price Information Service. That's down 46 cents from its peak in early April. Experts say gasoline could fall to $3.30 per gallon by July 4th.

Natural gas prices jumped more than 3 percent Thursday after the government said that the nation's supplies didn't grow as much as expected last week. The Energy Information Administration's report said the U.S. was holding more than 3 trillion cubic feet of gas in storage facilities. That's more than 27 percent higher than average for this time of year, but a little less than what analysts expected.

On the ICE Futures exchange in London, Brent crude fell by $3.46 to end the day at $89.23 per barrel.

In other trading on the NYMEX Thursday, wholesale gasoline lost 4.01 cents to finish at $2.5501 per gallon. Heating oil lost 6.21 cents to end at $2.5253 per gallon.

Natural gas rose by 6.5 cents to end at $2.5820 per 1,000 cubic feet.

© Copyright 2023 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Thursday, 21 June 2012 12:56 PM
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