Oil prices are back to where they were a year ago.
On Friday benchmark crude dropped $2.94, or 3.6 percent, to end the day at $79.20 per barrel in New York. Prices haven't finished that low since Sept. 29, 2010. Since then crude peaked near $114 a barrel in May of this year. It's fallen 31 percent since then as worries grew about the global economy.
Government data pointed to further economic troubles heading into a traditionally weak time for petroleum demand. The Commerce Department said that Americans are earning less money, which could affect consumer spending and demand for oil. And October is usually a slow month in the oil business. The summer driving season is over, and it will be a couple of months before heating demand perks up and travelers set out for winter holidays.
"There just isn't any demand here in the U.S.," independent oil analyst Andrew Lipow said.
Brent crude, used to price many international kinds of oil, lost $1.19 to finish at $102.76 in London.
Oil has swung up and down in the last few weeks, as the European financial crisis roiled energy markets. By Friday traders had turned their attention to falling crude price forecasts from major investment firms.
Morgan Stanley this week dropped its forecast for Brent crude by $30 to an average of $100 per barrel in 2012. Analyst Hussein Allidina cut the price to match tepid global economic growth and a recovery in Libyan oil production.
Allidina expects "significant supply increases and a material slowing in demand" by the second quarter of next year.
Gasoline has not fallen as much as oil. At the pump, a gallon of regular fell a penny to a national average of $3.445, according to AAA, Wright Express and Oil Price Information Service. That's a dime lower than a week ago but still 76 cents higher than the same time last year. A gallon of regular peaked this year at $3.98 on May 5.
In other energy trading, heating oil fell 4.73 cents to finish at $2.7793 per gallon and gasoline futures dropped 2.05 cents to end at $2.5381 per gallon. Natural gas lost 8.1 cents to end the day at $3.666 per 1,000 cubic feet.