Oil dips below $100 after disappointing ECB plan

AP News
Posted: Dec 08, 2011 3:45 PM
Oil dips below $100 after disappointing ECB plan

Oil prices slipped below $100 per barrel as they fell along with the stock market on investor fears about Europe's massive debts.

Benchmark West Texas Intermediate crude gave up $2.15 to end the day at $98.34 per barrel in New York. Brent crude, which is used to price foreign oil that's imported by US refineries, lost $1.34 to finish at $107.94 in London.

The Dow Jones industrial average lost 98 points, less than 1 percent, in late afternoon trading.

Prices slipped after the European Central Bank disappointed investors with only modest steps to revive its troubled economy. The ECB cut interest rates, but officials said there was no plan for major government bond purchases.

Concerns about Europe overshadowed positive news in the U.S. The Labor Department said that people applying for unemployment benefits fell last week to the lowest level in nine months.

Investors are watching Europe's struggles to contain a banking crisis that threatens to pull the region into recession. Widespread spending cuts could reduce energy demand within Europe and among major manufacturing countries like China that export goods to the eurozone.

At the pump, retail gasoline prices rose by nearly a penny overnight to $3.295 per gallon, according to auto club AAA, Wright Express and Oil Price Information Service.

In other energy trading, natural gas rose 3.6 cents to end the day at $3.457 per 1,000 cubic feet after the government reported that supplies fell more than expected last week. The Energy Department's Energy Information Administration said natural gas inventories fell by 20 billion cubic feet to about 3.83 trillion cubic feet for the week ended Dec. 2.

Heating oil gave up 5.26 cents to end at $2.9298 per gallon and gasoline futures fell by 2.03 cents to finish at $2.5666 per gallon.