Oil price falls to near $98 a barrel

admin Contributor
Font Size:

NEW YORK (AP) — Oil prices dropped below $98 per barrel Friday to the end a volatile week that mixed jitters about Europe’s debt with the prospect of tighter oil supplies and improving economic conditions in the U.S.

The price of oil ended the week lower than it began, despite a surge of trading that temporarily pushed crude above $100 at midweek for the first time since July. On Friday benchmark crude fell $1.41 to finish at $97.41 per barrel in New York, in light trading ahead of the Thanksgiving (Nov. 24) holiday week.

The sharp price fluctuations in oil will ripple through energy markets, but analysts say the ups and downs this week probably won’t have much effect on retail gasoline prices. Pump prices fell nearly a penny on Friday to a national average of $3.38 per gallon (89 cents a liter), according to AAA, Wright Express and Oil Price Information Service. A gallon of regular has lost 44 cents since hitting its 2011 peak near $4 per gallon in May. Analysts say prices could fall by another 13 cents by the end of the year.

For most of October and November, oil prices have soared on encouraging economic news in the U.S. and reports that crude supplies were dropping.

The benchmark price jumped as high as $103.37 on Wednesday, following an announcement by two Canadian pipeline companies that they would bring oil from a key delivery point in Cushing, Okla., to the Gulf Coast. That will reduce a glut of crude in the Midwest that has weighed on benchmark prices this year.

Prices plunged Thursday as borrowing rates jumped in Europe and investors worried that slowing eurozone economies would reduce demand for oil.

Analysts say the dust is still settling from the rapid swings in oil prices this week.

“The market is just wobbly right now,” independent analyst and trader Stephen Schork said.

On Friday the headlines about the world economy were mostly positive. Greek leaders predicted that the country’s massive budget deficit will fall sharply next year, with the help of bailouts and other debt relief. In the U.S. a gauge of economic indicators showed solid growth in October, and a stronger economy means rising demand for oil.

In other energy trading, heating oil fell 5.07 cents to finish at $3.0325 per gallon, while gasoline futures fell 2.87 cents to end at $2.4784 per gallon. Natural gas dropped 9.4 cents to finish at $3.3160 per 1,000 cubic feet.

Brent crude gave up 69 cents to end the week at $107.40 per barrel in London.