» Subscribe Today!
The Power of Information
Home
The Ledger - EST. 1978 - Nashville Edition
X
Skip Navigation LinksHome > Article
VOL. 35 | NO. 17 | Friday, April 29, 2011




Oil plummets on more signs of weaker US demand

Print | Front Page | Email this story

NEW YORK (AP) — Oil tumbled nearly 7 percent Thursday amid new signs that demand for fuel in the U.S. is weakening.

A stronger dollar also contributed to the drop, analysts said. Oil is down more than 10 percent this week, joining other commodities like silver and cotton in retreat. This follows a months-long rally in commodities that was partly driven by lower U.S. interest rates and a weak dollar.

Some analysts said the lack of any terrorist retaliation for the killing of Osama bin Laden also depressed oil prices.

Benchmark West Texas Intermediate crude for June delivery gave up $7.60 at $101.66 per barrel on the New York Mercantile Exchange. That's the cheapest price for oil since March 10. Brent crude fell $7.18 to $114.01 per barrel on the ICE Futures exchange.

Earlier in the week, industry and government surveys showed that Americans are buying less gas as pump prices rise. On Thursday, the U.S. said that the number of people applying for unemployment benefits reached the highest level in eight months. That should depress gasoline demand, analysts say, because large numbers of Americans drive to work.

"Commuters are the bedrock of gasoline demand," Cameron Hanover analyst Peter Beutel said. When people lose jobs, "you're killing the best part of that demand — the part that will always be there as long as someone has a job."

Falling oil prices haven't affected pump prices yet, however. A 1 gallon (3.79 liters) of regular is more than a dollar higher than a year ago and is close to $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.

Economists and 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."

The U.S. dollar rose strongly against 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 17.79 cents to $2.9651 per gallon and gasoline futures lost 15.64 cents to $3.1661 per gallon. Natural gas gave up 26.2 cents at $4.382 per 1,000 cubic feet.

Follow us on Facebook, Twitter & RSS:
Sign-Up For Our FREE email edition
Get the news first with our free weekly email
Name
Email  
TNLedger.com Knoxville Editon
RECORD TOTALS DAY WEEK YEAR
PROPERTY SALES 0 0 0
MORTGAGES 0 0 0
FORECLOSURE NOTICES 0 0 0
BUILDING PERMITS 0 0 0
BANKRUPTCIES 0 0 0
BUSINESS LICENSES 0 0 0
UTILITY CONNECTIONS 0 0 0
MARRIAGE LICENSES 0 0 0