Oil prices fall on economy, supply concerns

  • Business
  • Wednesday, 16 Feb 2011

NEW YORK (AP) - Oil prices retreated Tuesday on concerns about growing supplies of crude in the U.S. and weak retail sales numbers that suggested consumers were spending less because of high energy prices.

Benchmark West Texas Intermediate crude fell 49 cents to settle at $84.32 a barrel on the New York Mercantile Exchange. In London, Brent crude fell $1.44 to settle at $102.29 a barrel on the ICE Futures exchange.

U.S. stockpiles of crude oil continue to rise, undercutting the price of benchmark WTI.

The Energy department releases its weekly report on petroleum supplies on Wednesday. Analysts expect it to show increases in supplies of both oil and gasoline, according to Platts, the energy information arm of McGraw-Hill Cos. Oil supplies have been growing for weeks at the Cushing, Oklahoma, hub, which is the delivery point for WTI crude.

Energy traders also kept an eye on anti-government protests that continued in Iran and Bahrain after Egypt's president was forced from power last week. Demonstrations have happened in Yemen and Algeria as well. There is concern that unrest could spread to other countries and disrupt oil shipments from OPEC countries. Iran is the second-largest oil exporter in the Organization of Petroleum Exporting Countries behind Saudi Arabia.

"Investors had been worried about Algeria and Jordan, Yemen and the Arab Gulf states," energy consultants Cameron Hanover stated. "It seems that everyone in power is nervous."

In other Nymex trading in March contracts, heating oil fell 2.14 cents to settle at $2.7290 a gallon and gasoline lost 2.86 cents to settle at $2.4888 a gallon. Natural gas rose 5.1 cents to settle at $3.976 per 1,000 cubic feet.


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