Oil falls below $97 amid weak US economic growth

AP News
Posted: Nov 23, 2011 3:28 AM
Oil falls below $97 amid weak US economic growth

Oil prices fell to below $97 a barrel Wednesday in Asia as investors eyed weaker U.S. economic growth and fresh sanctions against Iran over its nuclear program.

Benchmark crude for January delivery was down $1.23 at $96.78 a barrel at late afternoon Singapore time in electronic trading on the New York Mercantile Exchange. The contract rose $1.09 to settle at $98.01 in New York on Tuesday.

Brent crude for January delivery was down $1.08 at $107.95 a barrel on the ICE Futures Exchange in London.

The Commerce Department said Tuesday that the U.S. economy grew 2 percent in the third quarter, less than the preliminary result of 2.5 percent it announced last month.

Investors also fretted that new international sanctions on Iran could reduce the flow of oil from the world's fourth biggest oil producer.

The latest U.S. crude supply data was mixed. The American Petroleum Institute said late Tuesday that crude inventories fell 5.6 million barrels last week while analysts surveyed by Platts, the energy information arm of McGraw-Hill Cos., had predicted crude levels would be unchanged.

However, inventories of gasoline jumped 5.4 million barrels last week while distillates dropped 900,000 barrels, the API said.

The Energy Department's Energy Information Administration reports its weekly supply data later Wednesday.

Some analysts expect recovering crude output from Libya to boost global supplies and help push prices down.

"Continued turmoil in the global economy, diminishing energy demand and the steady return of Libyan crude to the markets will apply downward pressure on energy pricing through the end of this year and the start of 2012," said Richard Soultanian of NUS Consulting.

In other Nymex trading, heating oil fell 2 cents to $3.03 per gallon and gasoline futures slid 4.2 cents to $2.52 per gallon. Natural gas dropped 1.7 cents at $3.40 per 1,000 cubic feet.