Tuesday, August 14, 2012

Oil falls on new signs of slowing global economy

The price of oil fell Monday on a new sign that Asian countries won't make up for slackened oil demand in Europe.

Japan says its economy grew less than expected during the second quarter. Consumer spending, which makes up more than half the nation's economic activity, fell, and export demand was anemic.

Economies in China, a huge importer of oil, India and other Asian countries also have slowed. That is worrisome because the Asia-Pacific region helped carry the global economy when the U.S. and Europe began to slow.

The Japan news comes after the International Energy Agency last week cut its global oil demand forecast for the year, citing "a weak economic backdrop."

Benchmark oil fell 26 cents to $92.62 per barrel in New York. The drop mirrored a decline in U.S. stock prices.

Brent crude, which is used to price international varieties of oil, rose 56 cents to $113.51 per barrel in London.

Brent is likely getting support from traders concerned about supply disruptions from the Middle East because of the potential for a regional conflict. That could affect shipments through the Strait of Hormuz, through which about one-fifth of the world's oil travels.

Meanwhile, the national average price for gasoline rose less than a penny overnight to $3.696 per gallon, according to AAA, Wright Express and the Oil Price Information Service. That's about 30 cents more than a month ago and nearly 10 cents more than a year ago.

Other futures prices on the New York Mercantile Exchange:

? Heating oil rose a penny to $3.03 per gallon.

? Gasoline was unchanged at $3.01 per gallon.

? Natural gas fell 1 cent to $2.76 per 1,000 cubic feet.

Associated Press

Source: http://hosted2.ap.org/APDEFAULT/f70471f764144b2fab526d39972d37b3/Article_2012-08-13-Oil%20Prices/id-8da8a82eaa584420b5fd56df6ec4767c

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