Oil continues its bumpy ride, falling to $85 a barrel on mixed economic data | iNFOnews

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Oil continues its bumpy ride, falling to $85 a barrel on mixed economic data

An Iraqi worker operates valves at the Rumaila oil refinery, on Nov. 9, 2009. THE CANADIAN PRESS/AP, Nabil al-Jourani
July 12, 2012 - 12:33 PM

NEW YORK, N.Y. - The price of oil has been on a bumpy ride, changing direction almost every day this month as the economy sputters along.

Investors and analysts say it's hard to tell where prices are headed. China and other emerging economies appear to need more oil. Yet those increases are offset by weaker demand in the U.S. — the world's biggest oil consumer — where the job market has stagnated, and in Europe, which continues to wrestle with massive government debts.

"The market seems kind of directionless," Gene McGillian, a broker and oil analyst at Tradition Energy, said. "Are we going to see the emergence of a global economic recession, or are things going to stabilize?"

The latest batch of data continued to deliver mixed views of the global economy.

Reports out of Europe on Thursday said borrowing costs rose in Spain and unemployment rose in Greece, stoking concerns about the region's financial crisis. Meanwhile, the U.S. Labour Department said the number of people filing for unemployment benefits plunged last week. Economists said they thought the drop will be temporary.

The International Energy Agency said global oil demand should rise this year, but the increase will be less than what it predicted a month ago.

Benchmark U.S. crude fell by 81 cents to US$85 per barrel in New York, while Brent crude lost 33 cents to $99.90 per barrel in London.

Natural gas futures dropped nearly two per cent after the government said U.S. supplies grew more than expected last week. The Energy Information Administration said the nation's supply is nearly 20 per cent higher than the five-year average.

The price of natural gas fell by three cents to $2.81 per 1,000 cubic feet in New York.

At the pump, retail gasoline prices in the U.S. were flat at a national average of $3.384 per gallon (3.7 litres), according to AAA, Wright Express and Oil Price Information Service. Gasoline prices have been steady this week. A gallon of regular is about 55 cents cheaper than what it was in April.

In Canada, the price at the pump averaged C$1.228 per litre, down from C$1.25 a month ago, according to GasBuddy.com.

In other futures trading, heating oil lost two cents to US$2.74 per gallon, while wholesale gasoline added nearly a penny to $2.77 per gallon.

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Follow Chris Kahn on Twitter at http://twitter.com/ChrisKahnAP

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News from © The Associated Press, 2012
The Associated Press

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